Bharat Masrani, chief executive officer of Toronto-Dominion Bank, received a 10-per-cent boost to his pay in 2015, raising his overall compensation to $9-million amid a turbulent year that saw the bank cut hundreds of jobs.
In an effort to put a brake on its expenses amid slowing revenue growth and improve efficiencies as consumers conduct most of their daily banking transactions on computers and smartphones, TD cut its payrolls by nearly 1,600 positions last year – Mr. Masrani's first full year as CEO since taking the helm in November, 2014.
"We will remain relentlessly committed to improving productivity," Mr. Masrani said following the release of the bank's fourth-quarter results in December. (It will report its fiscal first-quarter results on Thursday.) "We will further simplify our processes, optimize our physical distribution cost and improve our sales efficiency."
Operating conditions have also been a challenge for the banks: Weak economic growth, a depressed energy sector, slowing loan growth and low interest rates are resulting in a cautious outlook for profit gains.
Stock prices have reflected this outlook, with the S&P/TSX commercial banks index slipping into a bear market – defined as a decline of more than 20 per cent – earlier this year.
Last year marked the first full year for Mr. Masrani as TD's CEO, which largely accounts for the increase in his salary to $1-million from $750,000 in 2014, along with an increase in his equity incentive to $6.3-million.
However, in a statement accompanying the proxy circular, TD said that Mr. Masrani's compensation also reflects the bank's performance under his leadership.
"TD delivered strong financial performance in 2015, generating total adjusted earnings of $8.8-billion, an 8-per-cent increase over last year, reflecting great contributions from all of our businesses," Brian Levitt, TD's chairman and member of the human resources committee, said.
"The bank achieved record earnings and grew within our risk appetite. We are proud that TD was one of only two Canadian banks to achieve positive total shareholder returns in fiscal 2015."
TD returned 1.4 per cent in 2015, after factoring in dividends, compared with a decline of 4.1 per cent for the commercial banks index.
Meanwhile, many TD executives received compensation packages that were down slightly from 2014.
Colleen Johnston, TD's chief financial officer until the start of this year, saw her total compensation decline to $3-million in 2015, down from $3.1-million in 2014.
Bob Dorrance, group head of wholesale banking, saw his compensation decline to $7.8-million, down from $8-million.
Similarly, Tim Hockey, group head of Canadian banking until the start of this year, saw his compensation decline to $5.5-million, down a touch from $5.55-million.
Mike Pedersen, group head of U.S. personal and commercial banking, received the same pay: He was paid a total of $5.5-million (U.S.) in 2015, unchanged from last year – at least in U.S. dollar terms; in Canadian dollars, he got a nice boost.