MONTREAL – Laurentian Bank’s top five executives saw their total compensation reach approximately $ 9.4 million in 2018 as part of a fiscal year that was more hectic than usual.
This is a growth of about 6% over the previous year, notes the solicitation circular recently sent to shareholders of the financial institution for the annual meeting scheduled for 9 April in Toronto – not Montreal, where its head office is located.
Parallel to the deployment of its transformation plan last year, the bank was involved in a standoff with 1200 union members that ended on March 10 following the filing of a final offer. She also conducted an internal investigation to turn the page on the issue of problematic mortgages sold to third parties – an irregularity revealed at the end of 2017.
Laurentian generated net profits of $ 224.6 million last year, up 9%, while at the end of 2017, the increase in net income was 36%.
As part of its turnaround in 2016, the seventh-largest bank in the country – which plans to cut another 350 jobs this year – only wants to offer advice in its branches by the end of December.
“The investments made in the implementation of initiatives and in the development of growth platforms are producing positive results,” Isabelle Courville, chairman of the board of directors, whose mandate ends, said in his message to shareholders.
However, short-term performance has been dampened, in particular by higher levels of “liquidity and capital”.
In 2018, the total pay – which combines elements such as base salary, bonuses and other benefits – of the President and Chief Executive Officer, François Desjardins, was $ 3.6 million, up 14.6% . His base salary was approximately $ 595,000, up 7%.
Unlike 2016 and 2017, the 48-year-old Toronto-based banker and three other colleagues were granted stock options. In the case of Mr. Desjardins, the amount has been set at $ 286,641 for 2018.
The exercise price of the options is $ 38.97, while Monday, on the Toronto Stock Exchange, Laurentian shares traded around $ 41.60.
While welcoming some “significant” changes to Laurentian’s compensation structure, particularly with respect to equity compensation, Yvan Allaire, Chairman and Chief Executive Officer of the Institute of Corporate Governance, private and public organizations (IGOPP), however, opposed the granting of options.
“We are against options, except, perhaps, in the case of turnaround, but I do not think they can invoke that,” he said. I accept more or less their arguments on this aspect. ”
Laurentian says it has introduced options to make long-term incentive compensation more related to “creating value for shareholders”.
At the end of the last fiscal year, the bosses of the six largest financial institutions in Canada – excluding Laurentian – had total compensation close to $ 72 million, an increase of approximately 2.9% over the previous year. the previous year.
For its part, Desjardins Group President and Chief Executive Officer Guy Cormier’s total payroll was $ 3 million, up 9%.