I don't know personally about banks, but that's probably the general compensation scheme, lots of companies do that.I’ll leave it to others who enjoy research (or know more off-hand facts) but I recall that a large percentage of executive comp is tied to the share price and deferred share units. I recall a former colleague who earned units, but they were paid out after 3 years....right during a major home Reno in 2009. He was obviously expecting almost double to be paid. Does that make sense....that a large portion of comp is tied to the stock price 3 years away (when vested)? I also recall a requirement that senior executives need to hold a certain amount of shares for 3 years after they retire.....this was the “leave it better than you found it approach”. TD also ties approx 20% of comp to customer service scores. Not sure all this is 100% accurate but leads me to believe the execs are very focused on longer term results 3+ years, rather than focusing on each quarter. The CEO is sitting on 800,000 shares (deferred or otherwise)......I suppose he’s more focused on the long-term, then the quarterly losses that may result in a recession.
i suspect comp at most large firms is similar.
But no, that's not the right conclusion. Whatever the 3 yr vesting period, it will be rolling every year. So each year they are getting paid out the bonus that vests, based on the compensation granted 3 years ago.
Unless all the execs are brand new employees every 2 years, then they are sitting on big short-term bonuses based on upcoming stock/performance metrics.