(Bloomberg) -- Toronto-Dominion Bank slashed last year’s pay for its top US executive, Leo Salom, in the wake of its historic money-laundering scandal but also said it will grant him $2 million in share-based compensation if the firm hits certain targets in 2025. 

Salom, who has led Toronto-Dominion’s US division since 2022, saw his variable pay decline 35% in 2024, the bank said in its annual proxy filing Tuesday. His total compensation for the year was $3.5 million, down from $4.6 million a year earlier.

But the board’s human resources committee also underlined Salom’s importance to the bank’s recovery, noting that he’s expected to play a key role in the “remediation” of its US anti-money laundering compliance program.

The committee approved a one-time restricted share unit award of $2 million for Salom to be granted in 2025, with vesting of the award “subject to meeting AML remediation conditions and milestones.”

The decision to cut Salom’s bonus pay last year was in line with a broader move at the bank to cut variable compensation by C$30 million in total for 41 executives. Toronto-Dominion disclosed that move in January when it also said it would accelerate new Chief Executive Officer Raymond Chun’s start date by two months. 

The bank said at the time that it awarded zero bonus pay to its now former CEO, Bharat Masrani, who took home C$1.61 million last year, down from C$13.34 million in 2023. Masrani will remain available to the bank in an advisory capacity until the end of July and will receive a fee of C$500,000 a month.

“Executive compensation was adjusted to reflect the seriousness of the AML failures, the associated costs to the bank, and the limitations imposed on the U.S. retail business,” the bank’s board said in the proxy circular, referencing the $3.1 billion in fines Toronto-Dominion agreed to pay after settling with US authorities in October plus hundreds of millions of dollars in other costs and a regulatory cap on the bank’s US retail operations. 

Twenty-two individuals have left the bank as a result of “accountability reviews,” Toronto-Dominion said in the filing.

--With assistance from Melissa Shin.

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