(The Canadian Press)

Canada’s Big 5 bank CEOs pay rises 6.5% to earn $54M in 2018

Volatility in equity markets last year also put pressure on the banks’ valuations

The chief executives of Canada’s five largest banks collectively earned roughly $63.2 million in total compensation during the 2018 financial year, up about 12 per cent from the previous year.

Based on the banks’ latest proxy circulars, Toronto-Dominion Bank’s chief executive Bharat Masrani received the highest overall pay for the 12 months ended Oct. 31, 2018 at $15.3 million in total compensation, which includes elements such as base salary, performance-based incentives and pension value.

That’s up roughly 23 per cent from Masrani’s $12.4 million in total compensation for the 2017 fiscal year, marking the biggest annual pay bump among the five bank chiefs.

The second-highest paid banking chief executive was Royal Bank of Canada’s Dave McKay, who saw an eight per cent pay increase to $14.5 million in total compensation, followed by Bank of Nova Scotia’s Brian Porter who received $13.3 million, up 3.2 per cent from the previous year.

The Bank of Montreal’s chief executive Darryl White received $10.1 million in total compensation in his first full year at the helm, up 22 per cent from fiscal 2017.

The Canadian Imperial Bank of Commerce’s chief executive Victor Dodig received roughly $10 million in total compensation in the 2018 financial year, up 6.5 per cent from a year earlier.

Excluding pension value and other miscellaneous compensation items, the five bank CEOs earned roughly $54.7 million in total direct compensation, up roughly 6.5 per cent from the 2017 financial year.

While a double-digit overall pay bump may make some bat an eye, the increase in compensation is reflection of the complexities in the financial sector that these CEOs face, said Bill Vlaad, president of financial services recruitment firm Vlaad and Co., which also monitors compensation trends.

The banking sector employs tens of thousands of people and each of the five financial institutions has a growing international presence, he said. What’s more, as more Canadians do their banking digitally, these banks are deploying more complex technology, Vlaad added.

“There’s a lot of pressure on these CEOs, more so than for a traditional CEO of an operational company,” he said. “I think that justifies a great deal of their compensation.”These pay hikes came as the Big Five banks delivered a collective $43.2 billion in net income for the 2018 financial year, up nearly 7.2 per cent from the prior year. The banks continued to churn out profits despite worries over stricter mortgage lending rules and trade uncertainty.

READ MORE: Hackers targeting Canadian banks, mining companies

However, the volatility in equity markets last year also put pressure on the banks’ valuations. When comparing the share prices of each bank from the beginning of the 2018 financial year on Nov. 1, 2017 to the end on Oct. 31, 2018, the results are mixed. At one end of the spectrum, Scotiabank’s stock had slipped roughly 11.3 per cent during that period from roughly $78 to $70. RBC’s shares in that period slipped one per cent from $96 to $95. BMO and TD’s shares increased by roughly 3.6 and 3.4 per cent, respectively, to approximately $97 and $72 during that time frame. CIBC, at the higher end of the range, saw its shares increase from $107 to $112, or about 4.7 per cent.

Most of the banks outperformed the S&P TSX Composite Index during that period, which slipped roughly 6.25 per cent to 15,027.28 on Oct. 31, 2018.

“Any company can justify increases in compensation if the shareholders are also making return on their investments that well exceeds the market,” said Vlaad.

Armina Ligaya, The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

New utility adjustment policy approved for Sylvan Lake residents experiencing a leak

Council approved the new Leak Adjustment Policy at its meeting Monday night

Sylvan Lake students indulge in pancakes for Shrove Tuesday

Shrove Tuesday is known as a day of indulgence before fasting for Lent

These Kids Were Made For Singin’ and That’s Just What They’ll Do!

HJ Cody prepares for its fall musical “Peace, Love and Music: A 1960s Music Revue”

Sylvan Lakers heading to North American Indigenous Games

A coach and four players will be taking the trip to Halifax, N.S. in July to compete in lacrosse

Sylvan Lake welcomes two new doctors

Dr’s Biana Manchik and Andrew Schwartz are the two new doctors practicing at Sylvan Medical Center

VIDEO: Feds warned agricultural sector near ‘tipping point’ due to blockades

Canadian Federation of Agriculture points to lack of propane and feed due to Coastal GasLink dispute

ReProm: Second shot for LGBTQ Calgarians to enjoy milestone as themselves

Centre for Sexuality, a sexual health not-for-profit in Calgary, is holding its first ReProm fundraising gala

Calgary woman charged in aggravated assault of 11-month-old daughter

The girl was brought to the Alberta Children’s Hospital in Calgary with a broken arm

Little-used part of Constitution led to different carbon tax rulings: experts

On Monday, the Alberta Court of Appeal ruled 4-1 that the carbon tax is unconstitutional

Alberta legislature resumes: Focus on jobs and bill to punish protesters

Kenney’s United Conservative government was elected last spring on a mandate to create jobs

Child in hospital following fatal crash that killed father, sibling on B.C. highway

The single vehicle crash occured near Kamloops on Highway 5A

Province commits long term to 4-H in Alberta

10-year funding commitment will sustain re-structured 4-H organization

Do you talk to your spouse about money? 42% of Canadians don’t, poll suggests

Politics, sex, religion top list of taboo subjects for Canadians

Trudeau revisits blackface embarrassment during Black History Month

Photos and a video of Trudeau wearing makeup to darken his skin surfaced during last fall’s election campaign

Most Read