Ontario Teachers’ Pension Plan said it’s troubled by “overly generous” payouts made by Canadian Imperial Bank of Commerce to two top outgoing executives, and won’t support the lender on the issue at next week’s annual meeting.
Ontario Teachers, Canada’s third-largest pension-fund manager, has “significant concerns” on post-employment arrangements for former Chief Executive Officer Gerald McCaughey and former chief operating officer Richard Nesbitt, the Toronto-based pension fund said in an e-mailed statement. Both men left the bank seven months ago with a total C$25.2 million ($20.6 million) in payments after retiring.
CIBC, Canada’s fifth-largest lender by assets, disclosed executive compensation in a March 19 filing, including a C$16.7 million payout to McCaughey and an C$8.5 million payment to Nesbitt, both of whom are 59. CIBC chose to accelerate Nesbitt’s Oct. 31, 2015, retirement date and McCaughey’s April 30, 2016, end date to Sept. 15, 2014, when Victor Dodig took over as CEO.
“We question the need to enter into such arrangements in the first place and having to do so in our view raises questions about the orderliness and robustness of the succession planning process,” Ontario Teachers said in the statement.
Ontario Teachers held 220,650 CIBC shares, or about 0.6 percent of those outstanding, as of Dec. 31, according to the fund manager’s filings.
CIBC will hold its annual investor meeting in Calgary on April 23. Messages left with Kevin Dove, a CIBC spokesman, weren’t immediately returned.