CEOs at Canadian Banks Enjoy 10% Pay Raises on Average

Canadian banks were largely unaffected by the economic crisis which had such a dramatic effect on their American counterparts, and consequently bankers in the country enjoyed an average of 10 percent increase in pay for 2009 at the six largest banks doing business in Canada.

The top two executive increases were for Bank of Nova Scotia CEO Richard Waugh, who received a hefty pay increase of 29 percent, and Bank of Montreal CEO William Downe, who wasn't far behind, getting a pay increase of 25 percent.

As far as bank CEOs in Canada who top the compensation list in general, the top spot is held by Gordon Nixon, who is the CEO of Royal Bank of Canada, who had a salary of $10 million, and Edmund Clark, CEO of Toronto-Dominion Bank, who also received the same salary as Nixon. I'm measuring this in U.S. dollars. In Canadian dollars it was about C10.4 million at the time of this writing.

No banks in Canada had to be bailed out during the financial crisis, and there was little need to write down debt as a result. The Canadian banking system is considered the most sound in the world by the World Economic Forum, being identified in that capacity for two years in a row.

Edmund Clark, from Toronto-Dominion, said in a recent interview that the reason the Canadian banking system is so sound, is they "don’t switch flavors every year. If you look at the pay packages over a five-year period, what you would find is that we never had the extremes on the upside and, not surprisingly, we didn’t have the collapse on the downside, because our banking system didn’t collapse.”

I really like the emphasis of Clark here, as it does define what makes a solid banking system, and it's proven out in the practical performance of Canadian banks.

No one cares about good banking CEOs getting paid solid compensation when they get the kind of results they're enjoying. It's when they don't get the performance and still receive the high compensation packages that upsets everyone.