TD Bank Slashes CEO Bharat Masrani’s 2024 Compensation by 89% Amid AML Scandals

TD Bank has significantly reduced CEO Bharat Masrani’s 2024 compensation, slashing it by 89% in the wake of a series of anti-money laundering (AML) scandals that have cost the bank billions and led to regulatory penalties, including an asset cap on its U.S. operations.

Masrani’s total pay dropped from C$13.3 million ($9.2 million) in 2023 to C$1.5 million in 2024, following the elimination of his cash incentive and equity awards. This reduction comes after a previous C$1 million pay cut in 2023.

Masrani, who has been at the helm of TD Bank since 2014, has accepted full responsibility for the compliance failures that allowed criminal organizations to launder proceeds from fentanyl and narcotics trafficking through the bank. A U.S. investigation uncovered that drug traffickers had bribed employees at some of TD’s American branches to facilitate the illegal activity.

As a result of these violations, U.S. regulators imposed over $3 billion in fines on TD Bank. The regulatory fallout also included an asset cap on its U.S. business, which had been the bank’s most significant growth driver.

“While progress was made on several strategic objectives in 2024, the AML matter had a significant impact on the bank,” TD Bank said in a statement, highlighting the broader repercussions of the compliance breaches. In addition to Masrani’s reduced compensation, variable pay for other senior executives was cut by at least 25%.

Altogether, the bank reduced variable compensation for 41 executives by a total of C$30 million. This included both current and former leaders in operations, control functions, and internal audit, underscoring the widespread accountability measures implemented in response to the scandals.

Last month, TD Bank warned of a challenging 2025 and suspended its medium-term earnings forecast as it continues efforts to remediate its AML compliance issues. The bank also announced a leadership transition ahead of schedule, with CEO-designate Raymond Chun set to replace Masrani as chief executive on February 1.

By fLEXI tEAM