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How We Operate


Building The Better Bank Material Issues How We Operate


Governance, Ethics and Integrity Executive Compensation Managing Risk


Responsible Banking Extraordinary Workplace Environmental Leadership Strengthening Communities Reporting


Executive Compensation


G4-51 WHY IT’S MATERIAL TO TD +


Executive compensation is designed to reward results that are aligned with the long-term strategy of the bank. Doing so provides an important incentive for executives to act in the best interests of the organization, its employees and its shareholders.


MANAGEMENT APPROACH


TD has a balanced approach to executive compensation that is intended to attract, retain and motivate high-performing executives. Our compensation principles and approach are described in TD’s Proxy Circular.


A key element of TD’s approach is that a significant portion of the compensation awarded to executives vests at the end of a minimum of three years. As this portion is tied to the bank’s share price, there is added incentive for executives to make decisions that are in the best long-term interest of TD and its stakeholders.


SAY-ON-PAY


In 2010, TD voluntarily adopted “say-on-pay”, a process that provides shareholders a means to express concerns about executive compensation. If significant concerns are raised, the board of directors will engage with shareholders to understand the specific issues and recommend changes, as appropriate. In 2014, 93% of TD shareholders voted in favour of the bank’s approach to compensation, and there has been similarly high support from shareholders every year since say-on-pay was introduced.


LINKING ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG) FACTORS IN EXECUTIVE COMPENSATION


Incentive compensation is based on a combination of financial and non-financial measures. One of the key performance measures used to determine incentive pools for executives is an evaluation of the customer experience, which is assessed using feedback directly from customers following an interaction with TD.


We typically structure performance objectives against five categories: Customer, Business Operations, Financial, Employee and Community. These objectives are used to evaluate perform- ance, which has a direct impact on compensation, in alignment with the bank’s pay-for-performance philosophy.


Detailed information about executive compen- sation practices can be found in our Proxy Circular.


+ 2015 Proxy Circular


TD 2014 Corporate Responsibility Report Page 14





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