TORONTO – Royal Bank of Canada’s (TSX:RY) new president and chief executive Dave McKay earned $7.5 million in total direct compensation last year.
McKay’s compensation was prorated for each of the three roles he held during the year: group head of personal and commercial banking, president and president and CEO.
His total direct compensation included $995,479 in salary, a short-term incentive award of $1.5 million and mid- and long-term incentives that come to a total of $5 million, according to RBC’s management proxy circular.
McKay’s pension also saw a significant improvement after his appointment to the role of president and CEO. His annual pension will max out at $1.25 million at age 60. The value of the improvement was worth about $5.2 million in 2014.
Meanwhile, Gordon Nixon earned $9.2 million for the nine months he served as the bank’s chief executive in 2014 prior to his retirement.
The bank said McKay’s target direct compensation was set at 11 per cent below Nixon’s compensation.
The bank said the compensation targets set for McKay reflect the compensation committee’s decision to shift more towards performance-based pay instead of fixed compensation.
“We believe the compensation awarded to Mr. Nixon and Mr. McKay this year appropriately reflects their leadership in driving our record performance and our ability to deliver sustainable growth and industry-leading returns,” the bank said in a statement Tuesday.