TD has moved up its next CEO’s start date, the bank said Friday.
Raymond Chun, TD’s chief operating officer, will become group president and CEO on Feb. 1, according to a news release.
That hastens CEO Bharat Masrani’s departure from that role and from the bank’s board of directors. TD had previously said that transition would occur April 10.
Masrani “will remain available to the Bank in an advisory capacity” until July 31, Toronto-based TD said, and “will provide continuity” on the TD’s anti-money laundering remediation efforts during the transition.
The bank also moved up the end date on Masrani’s advisory role: TD had previously said he would remain in that capacity until Oct. 31. Masrani has been at the bank about 38 years, spending about a decade as CEO.
The bank also said it reduced variable compensation for 41 executives, including many no longer with the bank and those with leadership responsibility for front-line operations, control functions and internal auditing.
The compensation cuts totaled C$30 million ($20.8 million), TD said, and reflect “the seriousness of the U.S. AML failures, the associated costs to the Bank, and the limitations imposed on the U.S. retail business.”
Notably, Masrani didn’t receive a cash incentive award or equity compensation for 2024, the bank said. His total direct compensation was slashed by 89%, from C$13.3 million ($9.2 million) in 2023 to C$1.5 million ($1 million) in 2024. That’s in addition to a C$1 million reduction made in 2023, TD noted.
For all other senior executive team members, variable compensation for last year was cut by at least 25% from previous targets. The bank said it will share more details on 2024 compensation and adjustments for named executive officers in its proxy filing, scheduled for March.
Chun “has moved quickly and decisively to launch a review of our strategy, operations and investments,” TD’s board chair, Alan MacGibbon, said in Friday’s release. “We are excited to have Ray take the helm and lead TD into the future.”
Canada’s second-largest lender is currently undertaking AML remediation work it must do to satisfy regulators who hit the bank with $3.09 billion in fines. TD entered a plea agreement with the Justice Department in October over deficiencies in its money laundering safeguards that allowed criminals to funnel millions of dollars tied to illicit fentanyl through the bank’s accounts, according to a multiagency investigation.
The Office of the Comptroller of the Currency also imposed a $434 billion asset cap on the bank’s U.S. retail business.
The bank announced several board changes Friday, including MacGibbon’s departure by Dec. 31. The bank’s corporate governance committee has begun searching for a successor. MacGibbon became chair last February.
Five other directors – Amy Brinkley, Colleen Goggins, Karen Maidment, Claude Mongeau and Brian Ferguson – are set to leave the board following TD’s annual shareholder meeting April 10.
Elio Luongo, Nathalie Palladitcheff, Frank Pearn and Paul C. Wirth will be up for election at the meeting, TD said. Pearn has served as a compliance and risk executive at JPMorgan Chase, while Wirth has been a finance and accounting executive at Morgan Stanley.
“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,” MacGibbon said Friday.
