FINSwire Mar 28 2011

Baxendale Out at CIBC Retail Bank

By caroline van hasselt

Canadian Imperial Bank of Commerce shook up its senior ranks Monday, with Sonia Baxendale, a key executive who transformed the retail bank, leaving the fifth-largest Canadian bank.

Baxendale, a long-time CIBC employee, headed the retail bank for five years. She received C$4.44 million in compensation, including a C$750,000 base salary and a C$1.48 million cash bonus last year.

Her replacement is CIBC Chief Financial Officer David Williamson, who joined in January 2008. Toronto-based CIBC unveiled the management changes in a statement Monday.

"I would like to thank Sonia for her significant contribution to CIBC over many years," CIBC chief executive Gerry McCaughey said in a statement. "Thanks to Sonia's leadership our Retail Markets franchise today is strong, with market-leading positions in many businesses."

The bank wasn't immediately available to elaborate on her unexpected departure.

Kevin Glass, who joined CIBC in January 2009, replaces Williamson as chief financial officer.

Since becoming CEO in 2004, McCaughey has focused on the retail bank as CIBC's driver of earnings after a series of investment-banking missteps in the U.S. roiled the lender. In 2008, during the financial crisis, he brought in Richard Nesbitt, who previously ran the Toronto Stock Exchange, to clean up the investment bank, which had invested heavily in toxic U.S. subprime mortgage paper.

McCaughey is now handing Nesbitt, the wholesale-banking head, more responsibilities. Nesbitt adds international to his current responsibilities, which include wholesale banking, technology, operations and corporate development. He also takes on responsibility for the bank's corporate strategy, treasury and the bank's international operations, including FirstCaribbean.

CIBC is also splitting its wealth-management division into a separate company, creating a structure similar to its Canadian peers. CIBC Retail Markets, under Baxendale, had included personal and business banking and wealth management.

Victor Dodig becomes CIBC's group head of wealth management.

The appointments are effective Monday.

The four named heads are relative newcomers to the bank. Dodig has the longest tenure, having joined in 2005.

"This changing of the guard reflects a new organization that is moving away from risk and embracing its core, domestic franchise," said John Aiken, an analyst at Barclays Capital, in a note.

While "somewhat of a surprise," the changes are unlikely to sidetrack CIBC's 2013 retail earnings target of C$3 billion, he said.

Baxendale had forecast in September that the retail bank, including wealth management, would earn C$3 billion in fiscal 2013. She expected the biggest growth to come from personal banking.

This story originally appeared on Dow Jones Newswires.

McCaughey's $9.34 Million Payday

McCaughey, the CIBC CEO, received C$9.34 million in compensation last year, up 50% from 2009 after Canada's fifth-largest lender more than doubled its fiscal 2010 net income.

McCaughey, 54, took home a C$1.5 million salary and received a C$3.13 million cash bonus. He also received incentives and stock options totaling C$4.7 million, according to the bank's proxy circular released Thursday.

In 2009, McCaughey earned a total of C$6.24 million.

Nesbitt, who heads CIBC's investment bank CIBC World Markets Inc. and was given more responsibilities today for international, strategy and treasury, received C$7.96 million in compensation, including a C$750,000 base salary and a C$2.42 million cash bonus.

Baxendale, who is leaving, received C$4.44 million in compensation, including a C$750,000 base salary and a C$1.48 million cash bonus.

CIBC incorporated Financial Stability Board compensation principles into its pay-for-performance compensation approach, the proxy said.

Because their annual cash bonuses exceeded 40% of their total incentive compensation, the portion above 40% was converted into book-value units to meet the minimum 60% rate established by FSB, the proxy said.

In the year ended Oct. 31, CIBC earned C$2.5 billion, or C$5.87 a share, up from C$1.17 billion, or C$2.65 a share, a year earlier. Return on equity was 19.4%, compared to 13.9% in the year-ago period.

CIBC is the last of Canada's five largest banks to report executive compensation.

Edmund Clark, the CEO of Toronto-Dominion Bank (TD), the No. 2 lender in assets, topped the pay list, receiving C$11.3 million.

Caroline Van Hasselt is a reporter for Dow Jones. Write to her here.

This story originally appeared on Dow Jones Newswires.

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