The CEO of Royal Bank of Canada (RY.TO), Dave McKay, is set to receive an increase in total compensation for 2024 which will amount to C$17 million ($12.6 million), indicating a 12% rise from the previous year. Other banks have maintained their compensation goals after their CEOs failed to meet the 2023 objectives. Despite this, Neil McLaughlin, who heads the personal and commercial banking division, has been awarded a one-time special cash bonus of up to C$1.25 million for his contribution to the acquisition of HSBC’s Canada operations, RBC’s largest deal to date, which is expected to be finalized by the end of March. According to the bank, McKay’s long tenure and consistent performance were factors considered in its decision. McKay, who became CEO in 2014, earned C$15.22 million in 2023, which was 9% more than his targeted C$14 million.
Other Canadian banks such as Bank of Montreal, CIBC, and Bank of Nova Scotia have kept their compensation goals for CEOs unchanged in 2024. Shareholders will vote on these proposed compensation packages during the annual general meetings. On the other hand, top executives at U.S. banks have received pay increases, including a 4% raise for JPMorgan Chase’s CEO Jamie Dimon, a 17% increase for Morgan Stanley’s Executive Chairman James Gorman, and a 6% raise for Citigroup CEO Jane Fraser.
The adjustments in compensation reflect a challenging year for Canadian banks that was characterized by slower earnings growth due to higher loan provisions, a challenging mergers and acquisitions environment, and increased expenses. Scotiabank has maintained CEO Scott Thomson’s 2024 compensation target at C$9.5 million, which includes his base salary and other benefits. Meanwhile, CIBC and BMO have also kept their CEO compensation targets unchanged at C$11 million and C$11.75 million, respectively, acknowledging the economic uncertainties and unmet goals of the previous year.