Variable compensation for 2024 reduced by at least 25 per cent from target

TD Bank has adjusted executive compensation to reflect the seriousness of the U.S. AML (anti-money laundering) failures, associated costs to the bank, and the limitations imposed on the U.S. retail business, according to the employer.
With the change, 41 executives – including many who are no longer with the bank – received reductions to their variable compensation, totaling $30 million. These include those with leadership responsibility for front line operations, control functions, and internal audit, according to the bank.
Bharat Masrani, currently group president and CEO, received no cash incentive award or equity compensation for 2024, resulting in his 2024 total direct compensation being reduced by 89 per cent – from $13,271,000 in 2023 to $1,500,000 in 2024. This is in addition to the $1,000,000 reduction made in 2023.
“While progress was made on a number of strategic initiatives and objectives in 2024, the AML matter had a significant impact on the bank,” says TD Bank. “In addition, in light of the AML matter and bank's overall financial performance, variable compensation for 2024 was reduced by at least 25 per cent from target for all other members of the senior executive team.”
Six in 10 (60 per cent) companies around the world now apply environmental, social and governance (ESG) targets to share-based employee compensation – but most employers remain short-sighted, according to a previous report.
Also, the board of directors of CBC and Radio-Canada – despite laying off workers in 2024 – approved bonuses for some staff. A total of 1,194 eligible employees were paid out bonuses for 2023-24 fiscal year, according to a report from The Canadian Press (CP).
TD Bank accelerates CEO appointment
TD Bank has also accelerated the appointment of Raymond Chun to chief executive officer. Effective Feb. 1 this year, Chun will be the company’s president and CEO, about two months earlier than his previously planned appointment by April 10.
"Ray has moved quickly and decisively to launch a review of our strategy, operations, and investments, and has engaged with customers, clients and colleagues across the bank. We are excited to have Ray take the helm and lead TD into the future," says Alan MacGibbon, chair of the board, TD Bank Group.
Upon Chun's appointment, Masrani will retire as group president and CEO and from the board of directors. Masrani will remain available to the bank in an advisory capacity until July 31, 2025. During the transition, he will provide continuity on the bank's critical anti-money laundering (AML) remediation effort, according to the employer.
"I want to once again extend the board's thanks to Bharat for his almost four decades of service to the bank and for his many contributions to TD's success. We wish him the very best in his upcoming retirement,” says MacGibbon.
CEOs of Canada's largest and most-influential companies remain confident in their organization's three-year growth prospects (76 per cent) and the Canadian economy (83 per cent), according to a previous report from KPMG.
TD Bank makes adjustments to Corporate Governance Guidelines
The TD Bank board of directors has also approved amendments to its Corporate Governance Guidelines to reduce the discretionary director term extension from five years to two years after an initial 10-year term.
With this new policy in place, Amy Brinkley, Colleen Goggins and Karen Maidment will retire from the board at the 2025 Annual Meeting of Shareholders scheduled for April 10, 2025.
Also, Claude Mongeau and Brian Ferguson have elected not to seek an extension under the new policy and will also retire at the shareholders' meeting.
MacGibbon has also informed the board that he will step down as chair and retire as a director by Dec. 31, 2025. The Corporate Governance Committee has initiated a Chair succession process. Until a new Chair is selected, MacGibbon will provide continuity as he guides the Board's renewal and supports a successful CEO transition.
The remaining incumbent directors have joined the board since 2020.
Effective leadership succession is crucial for any business to find success, according to a previous report.