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Bharat Masrani, Group President and Chief Executive Officer of TD Bank Group, outside the bank offices in Toronto, on Sept 3, 2020.Fred Lum/The Globe and Mail

Toronto-Dominion Bank paid chief executive officer Bharat Masrani about $2-million less in 2020 than the year before as the impact of the global pandemic weighed on the bank’s financial results.

Mr. Masrani’s total compensation was $10.5-million last year, compared with $12.6-million in 2019, as the bank awarded him fewer shares, a smaller cash bonus and no pension-related pay.

The bank’s proxy circular, released Tuesday, praises his “steady leadership” during the crisis created by the novel coronavirus. The bank’s core services were never interrupted while it delivered payment deferrals and government relief funds to customers. And TD played a role in the US$26-billion sale of discount brokerage TD Ameritrade Holding Corp. to rival Charles Schwab Corp., as Ameritrade’s largest shareholder.

But his compensation was $1.3-million below his target pay of $11.75-million, a 12.7-per-cent gap stemming from TD missing its key financial target for profit after tax, reducing the available bonus pool. The bank’s earnings dipped sharply in its second and third fiscal quarters last year as customers were less active under lockdowns and the bank built up reserves against potential losses on loans.

In the filing, TD also said it will formally embed new metrics linked to the bank’s performance on environmental, social and governance, or ESG, factors in the 2021 compensation plan for top executives. The metrics will be related to climate change, diversity and inclusion, as well as employee engagement, as part of customer experience factors that determine 20 per cent of bonus pay. The new factors will be added to ESG-related elements the bank said are already “embedded” in compensation decisions.

Last week, TD reported that it earned nearly $3.3-billion in fiscal first-quarter profit – a sum that exceeded prepandemic levels.

Among four other senior TD executives whose pay is disclosed in the filing, three earned less in 2020 than they had in 2019: chief financial officer Riaz Ahmed, head of Canadian personal banking Teri Currie, and head of U.S. banking Greg Braca.

Only wholesale banking head Bob Dorrance earned more, with his total compensation of $8.5-million up more than $1-million from the prior year. The capital markets division he leads had an especially strong year as volatile markets led to surging trading fees and companies tapped markets to raise funding.

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