The CEOs of Canada’s six biggest banks earned a combined $74.5-million in 2024.Nathan Denette/The Canadian Press
A volatile year in Canadian banking resulted in several chief executive officers seeing significant increases in pay in 2024, but two top leaders getting major pay cuts.
The CEOs of Canada’s six biggest banks – Royal Bank of Canada RY-T, Toronto-Dominion Bank TD-T, Bank of Montreal BMO-T, Bank of Nova Scotia BNS-T, Canadian Imperial Bank of Commerce CM-T and National Bank of Canada NA-T – earned a combined $74.5-million, up from just under $72-million in total compensation in 2023, according to their annual proxy circulars.
The small increase – about 3.6 per cent in the aggregate – masked a wide range of pay increases and reductions.
Royal Bank of Canada CEO Dave McKay, National Bank of Canada CEO Laurent Ferreira and Canadian Imperial Bank of Commerce CEO Victor Dodig received the biggest raises, ranging from 20 per cent to more than 60 per cent. Scotiabank’s Scott Thomson saw a nearly 10-per-cent increase in total compensation in his first full year on the job.
Bank of Montreal’s Darryl White saw his pay fall more than 12 per cent after the bank missed financial targets as it set aside more money for potential loan losses and dealt with higher costs as it integrated its U.S. acquisition, Bank of the West. And TD’s Bharat Masrani saw pay fall 88 per cent in his final year as CEO as the bank wrangled with its responsibility for regulatory failures in the United States.
Last year, Canada’s banks grappled with the threat of a slowing economy and higher interest rates. The lenders increased their provisions for credit losses – funds the banks set aside for potential loan defaults – as higher borrowing costs and inflation put pressure on consumers and businesses.
Some banks weathered the challenging year better than others. RBC and National Bank secured key acquisitions that bolstered their expansion strategies.
Base salary makes up a small portion of a CEO’s compensation. Canada’s banks set targets for CEOs’ annual pay, and that pay includes bonus and stock awards. The banks then tweak the pay based on their results. The 2024 figures are for the banks’ fiscal years, which ended Oct. 31.
Mr. Ferreira, of National Bank, made $12.07-million in 2024, a nearly 30-per-cent increase from the prior year and a sum greater than received by the heads of TD, BMO and Scotiabank.
National Bank paid him a bonus of $2.59-million, compared with $1.87-million in 2023. The bank gave him stock and option awards valued at $7.78-million, compared with $5.62-million in 2023.
In its proxy circular to shareholders, National Bank cited its “solid performance” and Mr. Ferreira’s “leadership in the context of the acquisition” of Canadian Western Bank.
CIBC’s Mr. Dodig made $13.61-million, a 21-per-cent increase from 2023’s $11.21-million. Mr. Dodig’s 2024 pay ranked him second among the six CEOs, after Mr. McKay.
Mr. Dodig’s bonus of $2.42-million compared with 2023’s annual incentive of $1.94-million. CIBC gave him stock awards of $9.68-million, compared with $7.76-million in the prior year.
CIBC beat the financial targets in its bonus plan, including measures of profitability and revenue growth.
“Through Mr. Dodig’s leadership and continued execution of our bank’s client-focused strategy, CIBC delivered for all of its stakeholders in 2024,” the bank said in its proxy circular.
As previously reported by The Globe, Mr. McKay, CEO of Canada’s largest lender, RBC, was paid $25.97-million last year, a 61-per-cent raise from his prior-year compensation, or $16.13-million in 2023.
For the purposes of Mr. McKay’s bonus plan, RBC had set an adjusted net income target of $15.9-billion, but the bank earned more, at $16.6-billion.
The bank awarded Mr. McKay a bonus of $6.67-million, more than double his $2.7-million bonus from the 2023 fiscal year. The bank gave Mr. McKay stock and option awards valued at $15.82-million, up from $11.02-million the year before.
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 in what it called a “once-in-a-generation acquisition” in its proxy circular to shareholders.
Scotiabank paid Mr. Thomson $10.32-million in his first full year as CEO, compared with $9.40-million in 2023, when he replaced Brian Porter in the top spot partway through the year.
Scotiabank said Mr. Thomson “continued to deliver on our commitment to reallocate capital from developing to developed markets with a focus on the North American corridor.” It also cited an investment in the U.S. bank KeyCorp as “an early step in growing in the North American corridor” that will add to the bank’s profitability.
The CEOs at BMO and TD both had their compensation decrease in 2024.
BMO’s CEO Darryl White’s pay fell to $10.97-million, a 12.5-per-cent drop from the previous year. His share and stock option awards of $6.24-million were down from $7.41-million, and his bonus dropped to $2.28-million from $2.71-million.
For bonus purposes, BMO had set a target of increasing earnings per share 1.9 per cent in 2023, but earnings per share ultimately fell 14.3 per cent. BMO also missed goals for return on shareholders’ equity and cost management.
“Overall results were impacted by elevated provisions for credit losses that were above our historical range,” BMO said in the proxy circular. “While we did not fully achieve our financial goals, we exceeded expectations on our 2024 strategic objectives.”
As previously reported by The Globe, TD slashed Mr. Masrani’s pay in 2024 in the fallout of the anti-money-laundering investigation by U.S. regulators and the Department of Justice. He received no cash incentive award or equity compensation for 2024.
According to the filings, Mr. Masrani was paid a total of $1.61-million – 88 per cent below 2023. That year, he took a $1-million cut to his bonus pay in response to the terminated takeover deal of U.S.-based First Horizon Corp. and the bank’s continuing entanglement with U.S. officials.
In January, TD said 41 executives, including former staff, received reductions to their variable compensation, totaling $30-million, including those who oversaw front-line operations, control functions and internal audit. Variable compensation for TD’s most senior executives was reduced by at least 25 per cent from the target amount.