The billions of COVID-19 savings that flooded into Canada’s wealth and asset management industry has resulted in big bumps in pay for many of its chief executives.
Top executives at nine independent companies in the sector have had an average increase in their compensation of more than 40 per cent in 2021, compared with the prior year. In dollar terms, that was an extra $1.8-million per executive, bringing the average pay package to nearly $6-million.
The Globe and Mail analyzed securities filings from nine investment management companies who disclose their pay information in proxy circulars to shareholders or annual information forms.
The leaders of the wealth management divisions of Canada’s largest banks are not included in The Globe’s review, as the banks do not name them among the highest-paid executives in their annual disclosures.
CI Financial Corp.’s CIX-T chief executive Kurt MacAlpine saw one of the largest jumps in total compensation, to $10.60-million, up more than 75 per cent from $6.01-million the prior year. His annual cash bonus jumped to $3.88-million from $1-million in the previous year, while his share awards rose to nearly $5.6-million from $4.2-million.
His annual salary increased to $1,125,000 – up 40.6 per cent from 2020′s $800,000.
Mr. MacAlpine, who joined the company in 2019, has been on an acquisition spree, buying up registered investment advisers, or RIA firms, in the United States at a furious pace, acquiring more than 25 since January, 2020.
The deals have transformed CI into becoming a larger force in the U.S. wealth management industry, with more than 50 per cent of its revenue coming from its U.S. and Canadian wealth management divisions.
Part of Mr. MacAlpine’s bump in pay is attributed to increasing the company’s total assets by 66 per cent while reversing CI’s streak of mutual fund net redemptions in its asset management division. In 2021, the company saw positive mutual fund sales for the first time in six years, with a net total of $251-million in sales, compared to $8.78-billion in redemptions the prior year.
CI said it set a target incentive award of $5.75-million for Mr. MacAlpine in 2021, and it gave him a result of 135 per cent on the CEO scorecard of goals that included fund sales, asset growth, stock return and profit targets. That yielded an incentive award of $7.76-million, paid half in an annual cash bonus and half in share awards.
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Canaccord Genuity Group Inc.’s CF-T Dan Daviau made $13.02-million in his company’s 2021 fiscal year ended March 31, 2021, up more than 70 per cent from $7.66-million in the previous year. (Unlike other companies studied, Canaccord’s fiscal year doesn’t correspond with the calendar; its disclosure for the 2022 fiscal year that ended this March 31 will come this summer.)
Mr. Daviau’s annual bonus jumped to $6.95-million from $3.55-million the previous year, while the value of his share awards increased to $5.22-million from $3.25-million in the prior year.
In its circular, Canaccord says it pays Mr. Daviau as CEO of the company and as ”an active investment banking revenue producer and contributor to the capital markets business in Canada and the United States.” It targets his CEO pay in a range of $1-million to $7-million, and paid him at the top of that range in the year ended March 31, 2021, because the Canaccord board believed “all metrics were exceeded, most by a significant margin, during an unusual and unprecedented COVID-19 pandemic environment.” (The company’s shares jumped by nearly 173 per cent in the fiscal year.)
Canaccord said Mr. Daviau made $6-million from the company’s capital markets incentive compensation pool for Canada – an amount “discounted” from what another Canaccord investment banker “with the same level of client engagement” would have made.
Canaccord’s Stuart Raftus, who is chief administrative officer of the parent company and president of Canaccord Genuity Wealth Management, saw his total compensation more than double, to $6.03-million, on the strength of a $3.16-million bonus.
Canadian-based asset managers saw unprecedented investment fund sales in 2021. Mutual funds surpassed the $2-trillion mark in total assets, with record net sales of more than $112-billion for the year. The surge was almost five times industry net sales for the same period in 2020 – which totalled $23.6-billion, according to the Investment Funds Institute of Canada.
AGF Management Ltd. AGFMF, parent of AGF Investments Inc., said CEO Kevin McCreadie made $6.78-million, up 60 per cent from $4.23-million in the prior year. His annual bonus of $2.88-million was nearly double what it was for 2020, and he received share and option awards valued at $2.53-million, up from $734,400 in the prior year.
AGF executive chairman Blake Goldring made $3.25-million, up nearly 60 per cent from $2.06-million, on the strength of a $2.01-million bonus that was nearly double his 2020 bonus. Judy Goldring, president and head of global distribution, made just under $2-million, up more than 60 per cent from 2020. Her $985,200 bonus for 2021 was more than double 2020′s.
IGM Financial Inc. IGM-T CEO James O’Sullivan made $5.60-million in 2021 in his first full year as the company’s CEO. IGM said in 2020, upon ascending to the CEO job, he received his 2021 stock options, valued at $1.2-million, in advance, suggesting $6.8-million in total 2021 compensation.
At IGM’s subsidiaries, Mackenzie Investments CEO Barry McInerney made $6.57-million, down slightly from 2020′s $6.62-million. His bonus of $2.65-million was below 2020′s annual incentive payment of $2.84-million. Mr. McInerney announced his retirement earlier this year and will step down from his role on June 30, handing the reins over to Luke Gould, IGM’s chief financial officer.
And at IG Wealth (Investors Group) CEO Damon Murchison made $4.36-million, including share and option awards valued at $1.6-million, in his first full year on the job.
Jeffrey Carney was Mr. O’Sullivan’s predecessor as CEO of IGM, and simultaneously served as the CEO of IG Wealth. He made $7.64-million in 2019, his final full year in the two jobs. IGM paid $13.16-million to Mr. O’Sullivan and Mr. Murchison to fill the two roles.
Fédération des caisses Desjardins du Québec CEO Guy Cormier made $4.37-million in 2021, up 37 per cent from $3.19-million in 2020. His bonus of $1.53-million was up from $867,852 the year before.
In an e-mailed statement, company spokeswoman Chantal Corbeil noted that Desjardins compares itself to co-operative financial companies in setting compensation, and its ratio of CEO pay to its average worker is smaller than at large Canadian banks.
Industrial Alliance’s Denis Ricard and Kish Kapoor of RF Capital, the parent company of Richardson Wealth, were two CEOs who saw their total compensation decline by double digits.
Mr. Ricard made $5.99-million, down more than 13 per cent from $6.90-million in 2020. The decline was caused by a smaller number for the annual estimate of the increase in his pension – $2.44-million, versus $3.68-million in 2020. Excluding these estimates, Mr. Ricard made $3.54-million, up nearly 10 per cent from 2020.
Mr. Kapoor made $2.71-million, down nearly 13 per cent from $3.10-million in 2020. His bonus of $979,120 was below 2020′s $1.50-million, but a share award helped offset some of the decline.
Richardson Wealth has more than 160 investment advisers and over the past two years has been implementing a restructuring plan that began with GMP Capital – which was renamed RF Capital Group Inc. – selling off its capital markets division in 2019 and becoming solely a wealth management business.
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