TORONTO (Reuters) - Two of Canada’s largest pension funds, shareholders of Canadian Imperial Bank of Commerce, said on Friday they will demonstrate their unhappiness with CIBC’s executive pay structure at the lender’s annual meeting next week.
The Ontario Teachers’ Pension Plan Board, vexed by multimillion-dollar payments to two retired executives, plans to withhold support for members of CIBC’s compensation committee and to oppose the bank’s pay structure in a nonbinding vote.
CIBC named Victor Dodig as its chief executive last year, replacing Gerry McCaughey, who retired in September 2014. Richard Nesbitt, who was CIBC’s chief operating officer, retired a month later.
Earlier this month, CIBC announced that the two executives together stand to receive roughly C$25 million ($20.5 million) in total in post-retirement pay due to an acceleration of their retirement timetables.
“We have significant concerns with the decisions taken by the Management Resources and Compensation Committee over the past year with respect to the succession planning and post-employment arrangements made with both Mr. McCaughey and Mr. Nesbitt,” Teachers’ said in a statement.
The bank declined comment.
Teachers’, one of Canada’s top pension funds, owns a fairly small stake in CIBC according to Thomson Reuters data.
Separately, the larger Canada Pension Plan Investment Board (CPPIB) disclosed that it intends to also vote against CIBC’s executive compensation stance. CPPIB indicated, however, it plans to vote in favor of all of CIBC’s directors at the bank’s annual shareholder meeting in Calgary on April 23.
The moves come amid a growing outcry about large pay packages for senior executives at some Canadian companies.
“The issue is a broad one. Here we have these bank CEOs making gazillions of dollars, and when they get special retirement compensation arrangements it seems a little irksome,” said a source at a major Canadian asset manager that owns CIBC shares. He declined to be named because he was not authorized to talk on the subject.
“But is CIBC an outlier in that regard? No,” he added. “It’s reflective of what the other banks have done.”
Barrick Gold faces a fresh backlash over executive pay at its shareholders meeting later this month, with some big institutions planning to vote against its compensation plan and withhold votes for directors to protest a $12.9 million pay package for its Executive Chairman John Thornton.
Editing by Jeffrey Hodgson; and Peter Galloway