It was an interesting day for Canadian banking giant Toronto-Dominion Bank (TSE:TD), as it not only modified some of its pay plans, but also made it clear that it plans to keep people around and making personal contact with customers. This combination of philosophies left investors nonplussed, and shares slipped fractionally in Wednesday morning’s trading.
The good news in CEO pay was for its primary CEO, Raymond Chun. Chun’s salary is now set at C$11.4 million, noted reports, and his compensation target for 2025 stands at C$12 million. The news, however, was not nearly so good at other parts of the bank.
Leo Salom, head of the United States banking operation, saw his pay cut to $3.51 million thanks in large part to a series of anti-money laundering (AML) effort missteps. However, should he meet a set of milestones and conditions connected to AML provisions, he stands to get a $2 million bonus, which will be a significant step up. However, former CEO Bharat Masrani will be roundly kicked out, with his annual pay for his last year cut 89% to C$1.5 million.
Probably Not Replacing Tellers
Meanwhile, for anyone who thought that TD Bank might be inclined to save a few loonies by getting rid of tellers, there may be some good news in that vein. TD Bank made it clear: even as it works to be more “digitally convenient,” online efforts simply cannot take the place of human interaction. Some might have thought this would be the case, considering how the wider banking industry was going. Not to mention the face that the bank recently combined oversight of digital banking and contact centers into one position.
But that position’s holder, Jo Jagadesh, made it clear: TD Bank is “…putting the human at the center…” of its innovation efforts. While the bank will be paring down its workforce, a drop of about 10% through 2028, the key is to not have fewer humans facing customers, but rather, getting rid of people in support roles that could be replaced by artificial intelligence instead.
Is TD a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TSE:TD stock based on five Buys, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 8.85% rally in its share price over the past year, the average TSE:TD price target of C$89.20 per share implies 5.45% upside potential.
