Total compensation for Royal Bank of Canada’s top five executives climbed 7 per cent in 2013, to $47.6-million.
In his final full year on the job before he retires, RBC chief executive officer Gord Nixon made $14-million in 2013, after accounting for all forms of compensation including his pension, amounting to 2 per cent more than he made in 2012.
RBC’s earnings climbed 12 per cent last year, and the bank posted a record profit of $8.4-billion.
On a percentage basis, chief financial officer Janice Fukakusa saw her total compensation climb the most of the bank’s top five executives, who include: Mr. Nixon; Dave McKay, who runs personal and commercial banking head, and is taking over as CEO; and Doug McGregor and Mark Standish, who jointly ran capital markets. Ms. Fukakusa’s total compensation jumped 19 per cent to $5.6-million.
RBC ensures that its top executives hold a healthy amount of stock in order to align their personal interests with those of the bank’s shareholders. Mr. Nixon must hold enough stock such that his ownership equates to eight times the three-year average of his base salary, which amounted to $1.5-million in 2013. The other officers must six times their base salaries in stock.
Mr. Nixon currently holds $85-million in stock, while both Mr. McGregor and Mr. Standish have $42-million and $47-million worth of RBC shares each.
The majority of executive compensation at RBC is deferred. 80 per cent of this comes from deferred share units, which vest over a three year period. The remaining 20 per cent is tied to stock options that vest over 10 years.
When releasing its fourth-quarter results, RBC announced that Mr. McGregor is taking over as the sole head of capital markets, and that Mr. Standish is leaving the bank. In December, the board of directors approved a special $2-million deferred share bonus for Mr. McGregor “to recognize his expanded responsibilities.”