The majority of Toronto-Dominion Bank executives took a small pay cut after a year of uneven financial performance.
Although TD reported record profits from personal and commercial banking as well as from wealth, the bank's total earnings per share climbed by just 0.4 per cent. Even after stripping out a major insurance charge incurred during the third quarter, TD's 6.5-per-cent earnings-per-share growth fell short of its 7- to 10-per-cent target range.
In total, TD's top six executives saw their total direct compensation fall to $35.65-million for fiscal 2013, a 2.6-per-cent drop from the year prior. Chief executive officer Ed Clark made $10.3-million, before accounting for his pension, his lowest level of direct compensation since taking over as CEO in 2003.
Bharat Masrani was the only executive to get a pay raise, bringing in $6.7-million, but he was appointed chief operating officer partway through the year to help him transition into the CEO role come November. Most TD executives saw a direct compensation cut of between 2 and 4 per cent. However, in some cases their total compensation, which includes their pension, amounted to more than what they received in 2012.
While determining executive compensation, TD reviewed the amount it pays board members. After hiring an independent consultant to help, the bank determined that they deserved a raise because of "increases in the workload and responsibility placed on our directors," TD said in its proxy circular. "For example, the materials that directors must read in advance of board and committee meetings discuss more complex issues in more detail than was the case only a few years ago."
This year, the chairman of the board will make $400,000, up from $350,000 in 2013, while other directors will see their compensation climb to $200,000 from $165,000 last year.
As part of TD's compensation requirements, executive officers must hold a multiple of their base salary in the bank's shares. Mr. Clark, as the highest paid, must hold shares worth at least 10 times his base salary of $1.5-million. He currently hold $147-million worth of TD shares.