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Email this8:03 am
April 6, 2013
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AltaRed said
Executive compensation is always a thorn in the side of most of us. Regardless, the effect on the overall financials is pretty marginal. The banks probably spend more system wide on potted plants every year.…
Executive compensation is not material for the Bank of Montreal.
In fiscal year 2020, the bank had net after-tax income of $5.097 billion. Compensation of CEO, CFO, and three most-highly compensated executives was $31.8 million. That works out to be 0.62% of the net after-tax income.
If one calculates it based on net assets of $56.593 billion, like a mutual fund or ETF would, then it works out to be 0.056%.
1:12 pm
February 27, 2018
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Norman, you have lost ALL credibility in my eyes. Your mathematical reasoning is well beyond bizarre.
Using your rational thinking from the above post 21. China has a population of 1.4 billion, if 9 million were to die, it's .64%, it's nothing.
NORMAN there is no way in hell the likes of the RBC should make or be allowed to make 4.3 billion DOLLARS in 3 months, in the first place. Canada has a population of 38 million, do your percentage.
Politically you and i are not on the same side. I've never been a member of the conservative party but i believe you, at some point in time held a governmental post with the liberals. You reek of kathleen wynne.
1:58 pm
October 27, 2013
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Kidd, you are falling into the classic trap of the ignorant public. The absolute level of RBC's profit is not relevant at all. It is the profit per share that is relevant based on corporate metrics, e.g. share float, assets and liabilities, etc. etc. RBC's ROE is indeed healthy in and around 15% but that is about the level that common equity shareholders expect to get for their invested capital. https://www.macrotrends.net/stocks/charts/RY/royal-bank-of-canada/roe
What if RBC was twice the size it is with all of that increase in the USA with twice the number of shares outstanding? It could be that $8B profit per quarter is still just barely satisfactory.
Surely you are not as unknowledgeable as your post suggests.
By the way, the global death rate is https://www.medindia.net/patients/calculators/world-death-clock.asp It probably should be about twice that rate to reduce the environmental burden our species is putting on this planet.
4:19 pm
April 6, 2013
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Kidd said
Norman, you have lost ALL credibility in my eyes. Your mathematical reasoning is well beyond bizarre.Using your rational thinking from the above post 21. China has a population of 1.4 billion, if 9 million were to die, it's .64%, it's nothing.
Yes, that's actually nothing. A mortality rate of 0.64% per annum or 6.4 per thousand per year is actually better than Canada's 7.6 per thousand in 2019, before the COVID pandemic.
NORMAN there is no way in hell the likes of the RBC should make or be allowed to make 4.3 billion DOLLARS in 3 months, in the first place. Canada has a population of 38 million, do your percentage.
…
RBC has $1.69 trillion in assets on their balance sheet. $4.3 billion/quarter or $17.2 billion per annum on $1.69 trillion is 1.0% per annum. That's not out of line.
Your challenge is a lack of context. Consequently, you are bamboozled by talk of millions and billions.
4:25 pm
September 11, 2013
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Big numbers on their own mean nothing, materiality is a basic concept understood by all accountants.
Anyway, Bank of Montreal top 5 execs in total making less than (for example) Toronto Raptors top-paid player seems like a good deal to me. Even better is you can contribute zero to it if you want, just have no dealings with any business whose way of operating you don't like.
3:01 am
February 27, 2018
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My background is from the manufacturing sector, where something is made at a cost and hopefully sold for a profit. The sales price in many ways is determined by the consumer. If the item is too expensive, it won't be bought because there's freedom of choice.
The service sector is a whole different kettle of fish. Money is made by fees and penalties. The service sector is a leech, it bleeds money out of an economy. You've all cried and complained when your bank increases their charges or reduces their services. These actions by your bank are/were done as a means to increase profit. There is no free marketplace to determine what is justified because ALL the banks covertly work together.
I have no concern with the number of rbc shares, i don't care. It's when an outlandish fee of $25 this month, goes to $45 next month, so that the ceo can have a 20% increase to their compensation package.
Maybe i am as unknowledgeable as my posts suggest, or maybe you're blinded by the slop in your eyes from having your head buried in the trough.
Sit back and realistically look at your own "lifetime" income. At 100k a year for 30 years, that's 3 million dollars. Do you even make 100k a year?
When a bank ceo can make more than 3 times your entire lifetime's income in ONE YEAR, that's insane. And then the ceo has the audacity to ask for even more.
6:10 am
October 27, 2013
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There are many alternatives to the big banks so there is plenty of competition rather than collusion. Our trio of telecoms is essentially collusion given the general lack of country wide competition. So is our supply management processes with dairy, eggs and a variety of other goods. Those are places to actually direct your anger.
Available banking competition is not just online banking platforms either. Brick and mortar independents including credit unions. Those who don't want to pay RBC's monthly fees can easily move around to viable alternatives, even just from the list on this site. There is no pricing power and no lack of competitiveness given the wide range of alternatives. Like a manufacturer, every services business will charge what the market will bear for the market share that business is prepared to live with. Move on if you don't like it. Vote with your feet.
9:47 am
March 15, 2019
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Sun Life announced a 20% increase in their dividend.
12:23 pm
March 30, 2017
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Kidd said
When a bank ceo can make more than 3 times your entire lifetime's income in ONE YEAR, that's insane. And then the ceo has the audacity to ask for even more.
I rather see a bank CEO making millions a year than seeing a high school drop out whos good in baseball or baseketball making the same / higher amount. I value education more. From your background you are imply manufacturing a product is good and worth $$, providing a service is ... That is so biased and wrong. A barber provides a service, your family doctor and dentist provides a service for example.
Your other comment of RBC should NOT be allowed to be $4B a quarter, I dont know why you think a successful business / enterprise should be capped how much they are "allowed" to make. Do you prefer communism over capitalism ??
1:23 pm
October 21, 2013
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February 27, 2018
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A hockey player makes the big bucks because they draws the fans, merchandise, they score, they win. Sport players have a skill set that people pay to see, an education may not be a necessity. music artists are the same. When arena ticket sales drop, when no one likes what you sing, you won't be making those millions. Athletes have a very short span, someone younger, stronger, faster will replace them.
Barbers, doctors and whoever else savemoresaveoften mentioned. Yes, you pay for their service. I'm an electrician by trade, that's not to what i was referring.
When the td bank increased my daily minimum balance from 3k to 5k and increased every charge they could think of, those are service fees, they are uncalled for, fees and penalties for profit (words i used in post 26 that smso seemed to miss). The ceo of rbc dave mckay made 13.5 million dollars in 2019 because i paid more to write a cheque.
The members of this forum, cry and belly ache about their bank's shit service, poor interest rates of return and high fees, YET you're blind to the culprit of your woes. DAVE MCKAY made 13.5 MILLION dollars in 12 MONTHS by putting the screws to us and being rewarded for doing so.
SMSO. I'll be dead and buried long before you make 1 million dollars a year, never mind 13.5 million.
2:50 pm
October 27, 2013
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FWIW, I suspect retail banking profits wasn't the driver for pay raises. Wealth and capital management is.
I suggest you no longer bank at TD or RBC. Vote with your feet over to LBC Digital which has free checking (or any one of several others). I don't pay any fees for my bank accounts.
If I didn't like how one barber cut my hair, I'd move on to another place. Same as with banks.
3:47 pm
September 11, 2013
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You're right, athletes are different in that people pay to watch their feats. Though watching professional sports is like watching paint dry for me, I have zero interest in seeing a guy throw a ball through a hoop, hit a puck with a stick into a net, etc, it's all a bunch of hype about nothing from what I can see.
If you pay to write a cheque or pay bank fees that's a deliberate choice you make (lots of us do neither), so we have to assume you actually want to. Solutions have been provided, lots of options (e.g. credit unions, small online banks) for no fee banking, or buy bank shares and participate in the obscene profits of these money-making machines, etc, but all are rejected. Because maybe the actual point of all this is that some people make/have way more money than me and that makes me mad/envious and I'm determined to keep that as my focus.
5:55 pm
March 30, 2017
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Kidd said
A hockey player makes the big bucks because they draws the fans, merchandise, they score, they win. Sport players have a skill set that people pay to see, an education may not be a necessity. music artists are the same. When arena ticket sales drop, when no one likes what you sing, you won't be making those millions. Athletes have a very short span, someone younger, stronger, faster will replace them.Barbers, doctors and whoever else savemoresaveoften mentioned. Yes, you pay for their service. I'm an electrician by trade, that's not to what i was referring.
When the td bank increased my daily minimum balance from 3k to 5k and increased every charge they could think of, those are service fees, they are uncalled for, fees and penalties for profit (words i used in post 26 that smso seemed to miss). The ceo of rbc dave mckay made 13.5 million dollars in 2019 because i paid more to write a cheque.
The members of this forum, cry and belly ache about their bank's shit service, poor interest rates of return and high fees, YET you're blind to the culprit of your woes. DAVE MCKAY made 13.5 MILLION dollars in 12 MONTHS by putting the screws to us and being rewarded for doing so.
SMSO. I'll be dead and buried long before you make 1 million dollars a year, never mind 13.5 million.
The only thing I find shame from a bank's fee is when it charges $10+ per month when a reg bank account balance falls below $1k or some threshold. To me that is "twisting the arm / hurting" someone vulnerable who for whatever reason needs to keep a bank account. That to me is highway robbery. But on the other hand, a bank is not a charity. Its not just the CEO they have the pay, its also the shareholders like me and others on here they have to "report to".
I WAS a high paid bank staff and I can tell you I worked 10+ hrs even tho my pay slip says 37.5hrs per week. The more senior one is, the longer one works. A CEO works more hrs than me and thats a fact too.
12:53 pm
September 11, 2013
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About 350K of our neighbours, etc work at the big 5 banks, a lot of salaries, benefits and pensions to pay (calculate it), CEO and top brass get an immaterial amount of your $10+ fee.
1:48 pm
March 30, 2017
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Bill said
About 350K of our neighbours, etc work at the big 5 banks, a lot of salaries, benefits and pensions to pay (calculate it), CEO and top brass get an immaterial amount of your $10+ fee.
my point is not how much of the $10 goes to the CEO's pocket. Me being a shareholder and benefits from it, I am perfectly fine with helping those in need a hand and waive the fee. Its highway robbery to charge an account with only few hundreds in it and take away $120 a year....
3:01 pm
January 12, 2019
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Dean said
.
Yet another Good thread, started by Norman. But FWIW, I think it may be misplaced.Such threads about stocks, dividend increases and share buybacks, usually
go here ➡ https://www.highinterestsavings.ca/forum/investing/This is Peter's Domain ... so he can make the call.
Cheerio ❗
Dean
Well lookie here ... I'm Wrong again ❗
I guess there's just no method to it ... or maybe it depends on the weather. 
Go Figure,
- Dean
" Live Long, Healthy ... And Prosper! "
9:25 pm
April 6, 2013
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Kidd said
…
Maybe i am as unknowledgeable as my posts suggest, or maybe you're blinded by the slop in your eyes from having your head buried in the trough.Sit back and realistically look at your own "lifetime" income. At 100k a year for 30 years, that's 3 million dollars. Do you even make 100k a year?
When a bank ceo can make more than 3 times your entire lifetime's income in ONE YEAR, that's insane. And then the ceo has the audacity to ask for even more.
Some people have made more astute career choices than others. Clearly, the bank CEO's have made much better personal career decisions than the sub-$1 million/year crowd!
The issue is with you if you can't see that and slag those who have made smarter decisions in life. There's lots of opportunity in this country for those who don't blind themselves with that Marxist proletariat worker versus bourgeoisie capitalist garbage.
That Mississauga housemaid could have been as oblivious and spent her working years cleaning the houses of maybe 100 clients she could do herself instead of founding Molly Maid.
Same with that bank teller Matthew Barrett who could have retired decades later as a senior teller instead of as one of Bank of Montreal's CEO's.
As Bill mentioned, the bank's CEO's pay is not significant in the context of the bank's payroll. After all, what's $13 million a year in relation to RBC's total payroll of $4.1 billion for just Q3 2021?
2:09 am
November 18, 2017
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Those squeezed-out profits mostly go to shareholders, Kidd, not the few executives. If you take the risk of holding their equity, you may get those good profits.
If you don't want fat cats getting that cash, join a credit union and pay yourself. (Just not one that gives away a third of its dividends to the bicycle nazis!)
RetirEd
RetirEd
10:13 pm
December 12, 2009
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Norman1 said
AltaRed said
Executive compensation is always a thorn in the side of most of us. Regardless, the effect on the overall financials is pretty marginal. The banks probably spend more system wide on potted plants every year.…
Executive compensation is not material for the Bank of Montreal.
In fiscal year 2020, the bank had net after-tax income of $5.097 billion. Compensation of CEO, CFO, and three most-highly compensated executives was $31.8 million. That works out to be 0.62% of the net after-tax income.
If one calculates it based on net assets of $56.593 billion, like a mutual fund or ETF would, then it works out to be 0.056%.
While I can appreciate the desire to provide executive compensation in terms of ratios to assets, it's imperfect and also not correct. There are other management costs to running a bank besides executive compensation costs, notably, compensation paid to all employees of the bank, among others. If the cost of executive compensation alone is 0.05%, that is actually an eye popping, Earth shatteringly expensive relative cost. 0.05% of assets, per year, to fund the cost of the senior most executive team is far too high.
Cheers,
Doug
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