Dave McKay speaks at the Royal Bank of Canada annual meeting in Toronto on April 6, 2017.Frank Gunn/The Canadian Press
Royal Bank of Canada RY-T paid chief executive officer Dave McKay nearly $26-million last year, a 60-per-cent raise from his prior-year compensation.
The bank awarded Mr. McKay a bonus of $6.67-million, more than double his $2.70-million bonus from the 2023 fiscal year. The bank gave Mr. McKay stock awards valued at $13.46-million, up from $8.82-million the year before. Mr. McKay made $16.13-million in fiscal 2023.
Part of the 2024 stock award was a special grant in December valued at $4-million. RBC said Mr. McKay will get the stock in three years if the bank meets what it calls strategic cost and earnings objectives related to the integration of HSBC Canada, which the bank acquired last year.
RBC called it a “once-in-a-generation acquisition” in its proxy circular to shareholders, filed Thursday, where the compensation is disclosed. The bank said the $4-million award is “in recognition of the leadership required to integrate HSBC Bank Canada and realize the full value potential of the acquisition.”
The bank closed its acquisition of HSBC Canada in April, clinching a rare opportunity to take over one of the largest lenders in the country. Britain-based HSBC Holdings PLC put its Canadian subsidiary on the auction block after deciding to leave the market and reallocate resources to regions where it expects greater opportunities to grow its business.
The deal initially attracted interest from Canada’s Big Six banks. As Canada’s seventh-largest lender, HSBC Canada was the most significant takeover opportunity since the Canadian government made it more difficult to complete bank acquisitions more than two decades ago.
More than half of HSBC Canada’s retail and commercial clients have global banking needs, which means the acquisition moves RBC into products and services that it has not offered before, including multicurrency accounts that allow customers to save money in foreign currencies and trade on international exchanges.
RBC said the jump in Mr. McKay’s bonus came in part because the bank posted 2024 adjusted net income of $16.6-billion, compared with a goal of $15.9-billion. These figures do not include profit and costs from integrating HSBC Canada in its businesses.
Every element of Mr. McKay’s compensation rose in the most recent year. His salary increased to $1.92-million from $1.50-million in the year prior. RBC granted him stock options valued at $2.37-million, up from $2.20-million the year before.
RBC said Mr. McKay’s pay of $25.97-million reflects “financial and strategic strength across its global footprint,” which it said resulted in record earnings and the bank’s stock outperforming peers over the past three and five years. RBC also cited “the depth of Mr. McKay’s leadership and extraordinary efforts in creating long-term value for RBC’s clients, employees, communities where we operate, and shareholders.”
Mr. McKay made $16.13-million in fiscal 2023.
Pay for other executives also rose significantly, but more modestly than Mr. McKay’s.
Derek Neldner, the bank’s head of capital markets, received $11.71-million, up from $10.51-million in 2023.
Douglas Guzman, RBC’s deputy chair, made $9.23-million, up from $7.56-million the year before.
Neil McLaughlin, head of RBC’s wealth management division, made $8.17-million, up from $7.21-million in 2023.
New chief financial officer Katherine Gibson made $4.37-million in her first year in the role. She replaced Nadine Ahn, who was terminated by RBC in April when the bank alleged she had an undisclosed personal relationship with a colleague.
Ms. Ahn, now CFO at Canaccord Genuity Group Inc., is suing RBC for wrongful termination, and RBC is countersuing to claw back compensation and bonus pay. RBC reported her fiscal 2024 pay was $312,603 and said in a footnote that “as of the date of this circular, the final determination of amounts to be paid relating to Ms. Ahn’s termination (if any) remain unresolved.”
Editor’s note: This article has been updated to correct minor rounding errors in the statement of Dave Mackay's 2023 stock options and Neil McLaughlin's 2024 pay.