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(Reuters) -Canada's TD Bank set CEO Raymond Chun's 2024 salary at C$11.4 million ($7.88 million) and cut U.S. retail banking head Leo Salom's pay amid the lender's anti-money laundering (AML) issues, regulatory filings on Tuesday showed.
The bank, earlier this year, expedited Chun's appointment as CEO by more than two months, while also reducing outgoing CEO Bharat Masrani's annual salary by 89% to C$1.5 million.
Salom's compensation for 2024 has been reduced by 23% to $3.51 million, but he would receive a $2 million bonus in 2025 on meeting AML remediation conditions and milestones, the bank said.
TD is currently undergoing a remediation program, after the lender pleaded guilty over anti-money laundering lapses in its U.S. retail business that enabled drug traffickers to launder millions of dollars from the sale of fentanyl.
The lender was ordered to pay a fine of $3 billion and has implemented several changes, including conducting a strategic review.
TD added it appointed more than 40 new executives and 700 AML professionals to strengthen its risk and compliance capabilities.
"There is no doubt that 2024 was a challenging year for TD," board chairman Alan MacGibbon said.
"The gravity of TD's U.S. anti-money laundering failures, the associated costs, and the limitations imposed on the U.S. retail business had and will continue to have a significant impact on the bank."
Masrani, who will be with TD as an advisor until the end of July, will receive C$500,000 per month and benefits, the bank said.
The bank has nominated Ana Arsov, the former global co-head of financial institutions at Moody's Ratings, to its board. It had previously announced four other nominations, each with the expertise in risk and compliance, as five board members are expected to step down.
Chun's compensation target for 2025 was raised to C$12 million as he assumed the CEO role. His compensation was set at C$9.5 million while he served as the chief operating officer from November to February.
($1 = 1.4474 Canadian dollars)
(Reporting by Arasu Kannagi Basil in Bengaluru and Nivedita Balu in Toronto; Editing by Mohammed Safi Shamsi)