TD reduces pay for prime executives, approves award for U.S. head

Article content material

Toronto Dominion Bank decreased its prime executives’ pay final yr, but in addition accepted a conditional award of US$2 million to its U.S. banking head because the lender appears to repair its anti-money laundering (AML) program after being sanctioned final yr.

“Executive compensation was adjusted to replicate the seriousness of the AML failures, the related prices to the financial institution and the constraints imposed on the U.S. retail enterprise,” the financial institution mentioned.

But Leo Salom, TD Bank Group head of U.S. retail, will obtain a one-time restricted share unit award in 2025 due to the “important function” he’ll “proceed to play within the remediation” of the financial institution’s AML program, TD mentioned in a proxy assertion on Tuesday.

The award continues to be “topic to assembly AML remediation situations and milestones,” the financial institution mentioned.

In January, TD mentioned the variable compensation of 41 of its former and present executives in 2023 and 2024 was decreased by $30 million because the financial institution failed to forestall cash laundering at its U.S. branches. The lender was sanctioned by authorities within the U.S. final yr.

The financial institution’s former chief government, Bharat Masrani, didn’t obtain a money or fairness incentive for fiscal 2024, which decreased his whole compensation by 89 per cent from 2023. For the remaining members of its senior government workforce, TD decreased their variable compensation by not less than 25 per cent in 2024.

Aside from the US$2-million bonus, Salom’s whole compensation in 2024 was about $5.1 million, which was decrease than the $6.4 million he acquired in 2023.

Similarly, chief monetary officer Kelvin Tran’s whole compensation was decreased to about $3.1 million in 2024 from US$4.3 million in 2023.

After two successive misses, TD met analysts’ first-quarter expectations final week because it reported increased income in its Canadian private and industrial banking and wholesale banking segments.

Canada’s second-largest financial institution didn’t meet analysts’ expectations within the earlier two quarters after it was fined $3.1 billion and ordered by regulators within the U.S. to cap the enlargement of its retail banking enterprise in that nation for failing to forestall cash laundering from its branches there.

In December, TD suspended its medium-term monetary targets and mentioned it could conduct a evaluation of its methods. It hopes to offer new monetary targets within the second half of 2025 after its strategic evaluation is accomplished.

As a part of its evaluation, the financial institution bought its total possession stake in Charles Schwab Corp. in February to release about $20 billion. The financial institution is utilizing $8 billion of that to repurchase as much as 100 million shares and plans to make use of a portion of the cash to “drive natural development” and additional “deepen” relationships with its 14 million Canadian prospects.

• Email: nkarim@postmedia.com

Bookmark our web site and assist our journalism: Don’t miss the enterprise information you want to know — add financialpost.com to your bookmarks and join our newsletters right here.

Share this text in your social community