Share-Based Pay Lifts Total Compensation at Scotiabank

Share-Based Pay Lifts Total Compensation at Scotiabank

Mar 10, 2010

eFinancialCareers
News

Deferring compensation is working out nicely for staff at Scotiabank
if the January quarter is any indication. While a new incentive plan
multiplied stock-based pay, the total for salaries and other cash
compensation also rose for the investment banking unit's 1,568 employees
and dipped just slightly for the company overall.

In a table
accompanying its earnings release Tuesday, Canada's
third-largest bank recorded C$105 million (US$98.1 million at the Jan.
31 exchange rate) expense for stock-based compensation for the first
fiscal quarter ended Jan. 31. That's more than the preceding five
quarters combined. As a result, company-wide compensation and benefit
expense climbed 5 percent compared with the same period a year ago to
C$1.187 billion despite a smaller workforce.

Within Scotia Capital, the investment banking arm, total
non-interest expenses also climbed 5 percent from the year-earlier
quarter, to C$307 million. Compared with the fourth quarter ended Oct.
31, non-interest expenses rose 8 percent. "The increase reflects higher
performance-based and stock-based compensation due to incentive plan
changes," Scotiabank
says. "Salaries, pension and benefits costs and computer
expenses also increased, offset by lower legal provisions."

Last spring Scotiabank announced a new compensation scheme for
investment bankers, emphasizing deferred payments after three years. The
company doesn't break out compensation numbers for Scotia Capital or
its other business segments.

Revenue for Scotia Capital grew 28 percent from the year-earlier period
but slipped 1 percent from the fourth quarter, as lower credit fees
outweighed higher trading revenues.

Mike Durland, group head of global capital markets and Scotia
Capital's co-chief executive, drew a mixed picture for the remainder of
this year. He said loan volumes are contracting and loan loss
provisions, while better than expected, might not maintain recent
levels. In a conference call, Durland said the investment bank will
remain focused on energy trading, fixed income and global wholesale
banking, and expects strong performance in both fixed income and FX
segments

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