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TD Bank hurries up CEO handoff


Canada’s second largest financial institution cuts pay for 41 executives in wake of money-laundering scandal

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Toronto-Dominion Bank is dashing up the appointment of its new chief govt and has made sweeping adjustments to its board, just some months after regulators within the United States levied sanctions towards the lender for failing to observe cash laundering actions at its branches.

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Raymond Chun, presently chief working officer at TD, will now succeed Bharat Masrani as CEO on Feb. 1 as a substitute of April 10, as beforehand deliberate.

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“Ray has moved rapidly and decisively to launch a overview of our technique, operations and investments, and has engaged with prospects, shoppers and colleagues throughout the financial institution,” Alan MacGibbon, TD’s chair, stated in a press release. “We are excited to have Ray take the helm and lead TD into the long run.”

The financial institution additionally stated MacGibbon will step down as chair and retire as a TD director by year-end.

In addition, the board amended its company governance tips to scale back the discretionary director time period extension to 2 years from 5 years after an preliminary 10-year time period. As a consequence, 5 TD board members will depart.

Amy Brinkley, Colleen Goggins and Karen Maidment will retire from the board on the annual basic assembly on April 10, whereas Claude Mongeau and Brian Ferguson have elected to not search an extension below the brand new coverage and also will retire on the AGM.

TD stated 4 “extremely certified leaders with expertise in international banking, governance, danger administration, and regulatory compliance” will stand for election.

They embrace Elio Luongo, former chief govt of KPMG Canada; Nathalie Palladitcheff, the primary feminine CEO of Ivanhoé Cambridge Inc.; Frank Pearn, former international chief compliance officer and operational danger govt at JPMorgan Chase & Co.; and Paul Wirth, former deputy chief monetary officer, international controller and chief accounting officer at Morgan Stanley.

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“We are happy to have attracted extremely skilled leaders with international perspective and numerous expertise to the board,” MacGibbon stated.

Jefferies Inc. analyst John Aiken considered the adjustments as a constructive.

“Ray Chun can be getting the keys to the financial institution sooner … whereas the board of administrators will get an injection of recent blood,” he stated in a observe on Friday. “We view these bulletins positively because it infers that TD’s remediation path will stay an enormous push and will spell some aid for buyers.”

He stated he’ll look out for adjustments at different banks’ boards, as “danger administration and compliance turn into the primary challenge on the prime of the home.”

TD was fined about US$3.1 billion and ordered to cap the enlargement of its U.S. retail banking enterprise in October by the U.S. Department of Justice and different regulators for failing to observe cash laundering actions at its branches. The fantastic was anticipated — TD had saved apart the cash beforehand — however the cap took some without warning.

In December, TD suspended its medium-term monetary targets and determined to conduct a overview of its methods, which might make it “difficult” to generate earnings progress, the financial institution stated. It suspended its targets of seven per cent to 10 per cent earnings per share progress and 16 per cent return on fairness. It will present new targets within the second half of 2025.

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As a results of its failure to forestall cash laundering and the ensuing sanctions, 41 TD executives, together with many who’re now not with the financial institution, had their “variable compensation” decreased by a complete of $30 million, the financial institution stated.

Masrani didn’t obtain any “money incentive award or fairness compensation” for 2024, leading to his compensation being decreased by 89 per cent — to $1.5 million from $13.2 million.

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