RBC, CIBC, and National Bank lead 2024 bonus increases as 'Big Six' raise payouts by 12.2% overall
Canada’s largest banks plan to raise variable compensation for employees in 2024, according to BNN Bloomberg.
The Big Six lenders have allocated 12.2 percent more for bonuses compared to last year.
This rise comes amid a challenging environment for dealmaking and capital markets.
Notable increases are reported at Royal Bank of Canada (RBC), Canadian Imperial Bank of Commerce (CIBC), and National Bank of Canada.
While debt capital markets showed some activity, Canadian initial public offerings remained sparse until Groupe Dynamite Inc. went public last month. M&As were subdued for much of the year.
Despite these challenges, widespread job cuts were avoided.
Bill Vlaad, CEO of recruitment firm Vlaad & Co., commented, “We haven’t had a bloodbath in 2024. Things haven’t been good, but there’s been really good management of personnel.”
Bonuses, typically distributed in December, are tied to performance metrics. The increases reflect the amounts reserved by banks as of the fiscal year-end on October 31.
RBC increased bonus pay by 16.2 percent, supported by a 10 percent profit rise in its capital-markets division. CEO Dave McKay highlighted a “robust pipeline” driving results.
CIBC boosted bonuses by 19.1 percent. While capital-markets profits remained steady, strong overall financial performance pushed its stock to new highs. Spokesperson Tom Wallis said, “We pay competitively and have a pay-for-performance philosophy.”
National Bank raised bonuses by 13.9 percent, driven by a 19 percent increase in capital-markets profit. The bank cited solid performance across business lines as the basis for its compensation framework.
BMO and Scotiabank
Bank of Montreal (BMO) and Bank of Nova Scotia (Scotiabank) also increased bons pools, despite profit declines in capital markets.
BMO raised bonuses by 5.1 percent, citing its compensation framework’s alignment with long-term shareholder performance. Scotiabank increased bonuses by 4.2 percent, acknowledging progress in its strategic initiatives.
CFO Raj Viswanathan said, “This year’s all-bank performance-based compensation reflects early progress against our strategy amidst continued challenging market conditions.”
Toronto-Dominion Bank (TD) raised bonuses by 10.2 percent despite challenges, including a $3.1bn settlement with US authorities over money-laundering charges.
Spokesperson Elizabeth Goldenshtein attributed the increase to “higher business-specific incentives” in wholesale banking and wealth management, supported by the integration of US investment bank Cowen Inc.
The trend in Canada mirrors expectations in the US, where investment bankers, traders, and wealth management professionals anticipate double-digit increases in year-end incentive pay, according to a Johnson Associates report.
Variable compensation remains crucial for professionals in capital markets and extends to other divisions like wealth management and insurance.
