If you ever wondered how bank CEO pay compares across the northern border, rest assured: Chief executives stateside are getting a much sweeter deal.
The CEOs of Canada’s five largest banks — TD, Royal Bank of Canada (RBC), Bank of Montreal (BMO), Scotiabank and the Canadian Imperial Bank of Commerce (CIBC) — earned an average of $10.2 million in 2021, Bloomberg reported Monday. That’s a little less than one-third of the $31.8 million the leaders at five of the six largest U.S. banks averaged last year. (Wells Fargo has yet to disclose CEO Charlie Scharf’s 2021 pay.)
However, Canadian bank CEOs averaged larger raises in 2021 — 28.2%, compared with 20.9% in the U.S. That calculation for U.S. CEOs has a couple of variables.
First, it takes into account Citi CEO Jane Fraser’s 31.2% raise from 2020. But Fraser held a different title that year. Comparing what Citi paid its top executive in 2021 against what it paid former CEO Michael Corbat in 2020, CEOs at the five U.S. banks averaged a 17.3% raise.
Second, the calculation assumes a $27.5 million compensation package for Goldman Sachs CEO David Solomon in 2020. Goldman clawed back $10 million of that as a result of the 1MDB scandal. If Solomon’s pay, for number-crunching purposes, were to be pushed back to $17.5 million for 2020 and his boost to $35 million in 2021 counted as a 50% raise, the 20.9% five-CEO average would jump to 25.5%, meaning Canadian CEOs would still have an edge.
Some of that is because bank CEO pay in the U.S. was already well above that of Canadian counterparts. Morgan Stanley’s James Gorman, for example, pulled in $35 million for 2021. But his raise is in single-digit percentage points (6%) from 2020. The same can be said for JPMorgan Chase’s Jamie Dimon, whose $34.5 million in 2021 is a 9.5% uptick from the previous year.
The best-paid Canadian bank CEO, according to figures Bloomberg published Monday, is RBC’s Dave McKay, who received the Canadian equivalent of roughly $12.1 million — a 25.4% raise from his pay in 2020. His bank saw a 40% increase in income in 2021, the wire service reported.
BMO’s Darryl White saw the greatest increase in pay — 36.9% over 2020, to the Canadian equivalent of about $9.9 million. White led BMO to the largest deal in Canadian banking last year — an agreement to buy Bank of the West from BNP Paribas for $16.3 billion.
TD may have the inside track for biggest deal in 2022. The bank agreed last week to buy Memphis, Tennessee-based First Horizon for $13.4 billion. TD’s CEO, Bharat Masrani ranks second in pay among chief executives of Canadian banks, with about $10.4 million in 2021, a 28.1% raise from the previous year.
CIBC CEO Victor Dodig received roughly $9.9 million in 2021, a 31.8% raise. Scotiabank’s Brian Porter, meanwhile, received roughly $8.9 million, a 18.7% pay bump.
The 28.2% average boost for Canadian bank CEOs in 2021 outpaced the 18% increase those five banks handed out, on average, in variable pay last year, Bloomberg reported. It also dwarfed the 6.3% gain the average employee saw in 2021, according to the wire service.
Just in case that generates raise envy on the south side of the border, here’s a figure to counter that: Pay bumps for the five U.S. bank CEOs between 2020 and 2021 — whether counted as 17.3%, 20.9% or 25.5% — far outpace the average pay differential from 2019 to 2020: minus-1.2%.
