CEO Bharat Masrani, seen here in Toronto in March, 2018, saw his total compensation fall to $12.64-million in 2019, versus $15.32-million in 2018Chris Young/The Canadian Press
Pay for most of Toronto-Dominion Bank’s top executives fell in the last fiscal year as the bank failed to meet its internal profit goals, it said in a shareholder disclosure Monday.
CEO Bharat Masrani saw his total compensation fall to $12.64-million in 2019, versus $15.32-million in 2018, a year when his compensation was boosted by a special $1.9-million stock award. Three other executives – chief financial officer Riaz Ahmed, wholesale-banking head Bob Dorrance and U.S. retail head Greg Braca – saw their pay packages fall.
One of the main drivers in the pay changes was a drop in annual cash bonuses after a so-so fiscal 2019. TD said it missed its profit goal of just over $13-billion by more than $500-million.
More goes into the complex bonus calculation, however. The profit target, while the majority of the formula, is just one business metric considered. Customer experience, for example, is another. And the TD board’s compensation committee can consider additional factors, as well, such as strategic initiatives.
Ultimately, TD arrived at a “business performance factor” for executive incentive pay at 98.8 per cent of bonus targets – the level Mr. Masrani received.
Performance-based pay for TD’s top executives surged in 2018, when the bank’s profits routinely outpaced expectations. That was driven principally by rapid growth in its U.S. banking arm in the midst of a booming U.S. economy. TD has an extensive retail banking network with about 1,250 branches stretching across the eastern United States. In 2018, TD arrived at a business-performance factor of 110 per cent, resulting in bonuses significantly above target.
By contrast, 2019 brought more muted results at TD, bookended by choppy earnings in the first and fourth fiscal quarters. The bank’s first-quarter results suffered from a rare loss in its wholesale banking division amid volatile financial markets, and TD wrapped up the year with elevated provisions for loan losses as well as a $154-million restructuring charge.
The only executive to break the TD pay trend, among the five whose compensation TD had to disclose, was Teri Currie, the group head of Canadian Personal Banking. She saw a boost in total compensation to $6,295,000, from $4,950,000, Her bonus increased by $800,000 because her overall compensation target increased, and she received a special $750,000 stock award “in recognition of Ms. Currie’s performance and significant achievements in 2019.”
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