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HOW WE OPERATE RESPONSIBLE BANKING WORKPLACE ENVIRONMENT COMMUNITY GOVERNANCE


G4-51


Executive Compensation 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 long-term interests of TD and its stakeholders.


2015 Performance


Say-on-pay In 2010, TD voluntarily adopted “say-on-pay”, an annual 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 2015, 95% of TD shareholders voted in favour of the bank’s approach to compensation, and there has been significant support from shareholders every year since say- on-pay was introduced.


Linking environmental, social and governance 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 in terms of five categories: customer, business operations, financial, employee and community. These objectives are used to evaluate performance, which has a direct impact on compensation, in alignment with the bank’s pay-for- performance philosophy.


Go Deeper 2016 Management Proxy Circular TD’s Approach to Compensation


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