Of course record profits never stops a company from looking for new ways to cut costs, but this one may have been a step too far. I suspect the Royal sees the end of the RE/HELOC/CHMC feeding frenzy, and is looking for some quick savings to try and shore up earnings. The executive suite have a lot of their compensation tied to the earnings and stock price.
The CEO owns $33 Million of shares in the company and the rest of the executive suite isn't hurting:
G.M. Nixon
President and Chief Executive Officer
2009- $12 Million 2010 $11.8 Million 2011 $$11.1 Million and 2012 $12.6 Million
J.R. Fukakusa
Chief Administrative Officer and Chief Financial Officer
2009 $4.4Million 2010 $3.4Million 2011 $4.5Million
D.I. McKay
Group Head, Canadian Banking
2009 $3.6 Million 2010 $4.3 Million 2011 $4.8 Million
A.D. McGregor
Co-Group Head, RBC Capital Markets
2009 $12.9 Million 2010 $10 Million 2011 $8.2 Million
M.A. Standish
Co-Group Head, RBC Capital Markets
2009 $14 Million 2010 $10.3 Million 2011 $8.3 Million
2009 $14 Million 2010 $10.3 Million 2011 $8.3 Million
This does not include severance or pension benefits which will run into many Millions for each of the above.
A few things that I find interesting:
The CEO is not even the most highest paid executive. It is always the head of trading that garners the biggest pay-cheques. In fact there may be RBC traders that make even more that these folks and are not on the reporting list.
In 2009, the executives got the highest pay 12 + 4.4 + 3.6 + 12.9 + 14 = $46.9 Million for the five of them. You remember 2009, the year of the fiscal crisis.
That was the year that the Government came to the rescue of the big banks, big time. Interest rates where slashed, and CMHC was doubled (I believe late 2008) allowing banks to pass off risk to the tax-payer, and portfolios of consumer debt were purchased to free up bank funds.
SO...while $47 Million is not a huge sum in the self-entitled corporate world, were a single US CEO will pay himself that much in a bad year, the Canadian banks are different.
Public policy is changed so that they CAN make huge profits, even if that means the risk is moved off their balance sheets to that of the Government (ie us!), so they have some degree of social responsibility. That means not pushing debt to the degree that Canadians are in trouble. It also means not going for the cheapest option at every turn, if it effects the incomes of ordinary employees. I would say they have failed in both capacities.
If things are THAT bad at the bank, how about the capping everyone's salary and benefits at say $3 Million. I mean that is a good chunk of money, unless you are trying to build a dynasty. Then the recipients of pink slips might feel less violated.
BTW the way all the Executive suites justify their income, is to say.."we have 76,000 employees and so we run highly complex organizations"
For comparison:
The PM of Canada earns about $317 K
The President of the US $450K
The Head of the Salvation Army $130K
