A Royal Bank of Canada (RBC) sign is seen in downtown Toronto in this file photo.MARK BLINCH/Reuters
The two people who run the capital markets wing of Royal Bank of Canada added more than $2-million each to their total direct compensation in 2012 – a significant rebound from the pay cuts they took in 2011.
Douglas McGregor and Mark Standish, co-chief executives of
RBC Dominion Securities Inc. were the two highest paid executives after the RBC's CEO, Gordon Nixon.
Mr. McGregor earned $10.4-million in total direct compensation, while Mr. Standish brought in just under $10.4-million, according to regulatory filings. Each received $8.2-million through 2011, roughly 20 per cent less than 2010.
Although the two executives have the smallest base salary among the top five highest-paid leaders at RBC (about $500,000), they have the largest short-term cash incentives (nearly $3.5-million). They also have double the long-term incentive stock options received by RBC's head of Canadian banking, David McKay.
The compensation for executives at Canada's largest lender reflects the growth in the bank's investment banking and securities unit. RBC also apparently had a better year in retail banking, after a write down posted in its U.S. retail division chewed into 2011's profits and pay totals.
Mr. McGregor and Mr. Standish hold a lot of the credit for turning RBC's capital markets division into one that can truly compete with bigger U.S. players. RBC's investment bank had a good year in 2012, hitting the top of the league tables for debt and equity underwriting, initial public offerings and acquisition advice.
That success was due, in large part, to some big energy deals and strength in a broader range of markets, according to data from Thomson Reuters.
Mr. McKay received $5.1-million, up from $4.7-million. That's a nice raise, but it's still only half of the money the capital markets executives received, despite his business being the largest group in the bank. Mr. McKay is thought to be the leading candidate to replace Mr. Nixon when he retires.
Mr. Nixon made $12.6-million in 2012 – a figure that is 12 per cent above his target level. The year prior, after the U.S. retail banking charges, Mr. Nixon received $10.1-million, down from $11-million in 2010.
Editor's note: This story has been updated to correct David McKay's 2011 compensation, which was $4.7-million, not $3.9-million.