February 26, 2009

Bank to poll shareholders on compensation

Canada's sixth largest bank will become the first in the country to ask shareholders for their reaction to executive compensation plans, the bank said Thursday.

Starting next year, National Bank of Canada will submit top executives' pay plans to a non-binding shareholder vote, the Montreal bank said.

In so doing, the bank is acknowledging the developments of the past few weeks relating to this matter and fulfilling a wish expressed by many of its shareholders, National Bank of Canada said in a statement.

Investors have been enraged over executives, including National Chief Executive Officer Louis Vachon, taking home millions as bank profits tumble, The Globe and Mail reported.

CEOs of other big banks, including No. 1 lender Royal Bank of Canada, have declined bonus payments, the newspaper said.

National said Thursday its first-quarter profit fell 73 percent to $69 million from $255 million a year ago as it took $184 million in charges related to asset-backed commercial paper, which seized up when the credit crisis hit.

Its fall was the largeest of three big Canadian banks reporting results Thursday, although most Canadian banks outperformed many of their global rivals.

RBC posted a 15 percent quarterly profit drop, beating most analysts' estimates by 26 percent, as writedowns related to the credit crisis cut earnings $646 million.

No. 5 Canadian Imperial Bank of Commerce reported net income of $147 million, or $1.67 a share, reversing a year-ago loss and beating most analysts' profit estimates of about $1.53 a share.