AGM 2021

Apr 13, 2021

Whereas one often takes this opportunity to acknowledge the indigenous lands upon which we're gathered, I recognize that we're joined together virtually from several traditional territories. Therefore, I would like to begin today's meeting by honoring indigenous populations and by talking about my commitment to reconciliation with indigenous peoples. I am committed to learning more about the cultures, histories and traditions of all indigenous peoples and respecting those who share such information. To help fulfill this commitment, I have met with some of our indigenous Scotia bankers to better understand how their perspectives and values can be incorporated into serving all our customers. Members of the bank's leadership team and I are committed to visiting indigenous communities and meeting with their leaders as soon as we're able to do so. I am committed to understanding the vision that indigenous communities hold for future generations, and we'll continue to work with each community to provide access to the tools needed to build a more prosperous future. To help fulfill this commitment, I'm listening to indigenous peoples and thought leaders to better understand the role that Scotiabank can play in growing the indigenous economy. I am committed to working to remove systemic barriers that have in the past made it difficult for indigenous peoples to access financial services and have meaningful careers in banking. To help fulfill this commitment, I am supporting the creation and implementation of financial products, services and spaces designed exclusively for our indigenous partners and employees. I make these commitments to all indigenous peoples of the lands personally and as a member of Scotiabank. Thank you, Brian. Good morning, ladies and gentlemen. My name is Aaron Regent, and I'm the Chairman of your Board of Directors. It is my pleasure to welcome you to Scotiabank's one hundred and eighty ninth Annual Meeting of Shareholders. Closed captioning is available on the webcast, and we are broadcasting in English and French through all channels. Last year, in response to the COVID-nineteen pandemic, we made the decision to hold our first ever virtual annual meeting to ensure the safety and well-being of our shareholders, employees, communities and other stakeholders. We could not have predicted that we would be, once again, holding this meeting in a virtual format in order to abide by government regulations and continue to protect the health and safety of our many stakeholders, which are of utmost priority to Scotiabank. We remain committed to look forward to returning in person meetings once health and safety regulations allow. Until that time, we are making every effort to host this meeting in a manner that promotes shareholder participation by replicating the in person experience to the maximum extent possible. And we thank you in advance for your patience. Any modifications to our procedure have been approved by a court order we have received, along with other financial institutions, again this year to allow us to host meeting through electronic means. This order provides us with the necessary means to conduct this meeting in a manner that supports shareholder engagement and allows shareholders to exercise their rights to participate and vote. And allow me to introduce the members of Scotiabank's management team who will be presenting today: Brian Porter, President and Chief Executive Officer and Julie Walsh, Corporate Secretary and Chief Corporate Governance Officer. In accordance with the bylaws of the bank, I, as Chairman of the Board, will act as Chair of this meeting, and Julie Walsh will act as Secretary. I appoint Amanda Castellano and Colleen Nielsen of Computershare Trust Company of Canada as scrutineers. I also note that the Board of Directors and senior management have also joined us remotely and are available to answer questions as required. Jim Newton, Ilyo Longo, Naveen Kalya and Reinhard Doxla, representing our auditors KPMG, are also participating electronically. I received proof that notice has been duly given and that a quorum is present. As such, this meeting is duly constituted. We have a few guidelines on how this morning's meetings will proceed. To facilitate the introduction of motions, given we are limiting the size of group gathering, the bank has asked Julie to move and Brian to second the motions for shareholders' consideration today. Julie will now speak to some of the procedural items. For those registered and beneficial shareholders who have not voted in advance, voting will be available throughout today's meeting until the formal items of business are concluded. Instructions on how to submit your votes are available under the information icon on the top left side of your screen if you are watching this webcast and also in the virtual AGM user guide and our rules of conduct located on our Annual Report and Annual General Meeting webpage. The rules of conduct can also be found under the document icon at the top left side of your screen if you are watching our webcast. The items to be voted on today are the election of directors, the appointment of the auditors, the advisory vote on executive compensation and the shareholder proposals. Each item of business that will be put before this meeting will be voted on by ordinary resolution requiring a simple majority of the votes cast for approval. We will provide preliminary voting results during today's meeting, and the final voting results will be available following the meeting. Thank you, Julie. We will be conducting the meeting in accordance with our posted rules of conduct. I also note that questions may be raised by shareholders through the various channels made available today. Shareholders will have the opportunity this year to ask questions verbally through the webcast. For questions submitted through the web chat or the conference call line, I've asked Julie to read out the questions. The agenda for today's meeting is posted as part of our webcast. Similar to previous years, we will have a general question period at the end of the meeting. If you have a question on the business of the meeting, shareholders are encouraged to submit their questions as soon as possible during the meeting so that we can do our best to address them at the appropriate time. For those wishing to ask oral questions, after you are prompted to provide your phone number, please ensure that you also note the subject matter of the question so that we can do our best to address it at the appropriate time during the meeting. To facilitate the timely conduct of our business and to ensure that all shareholders who wish to raise issues at the meeting have an opportunity to do so, I would ask that each speaker be brief and concise and limit their comments to three minutes and focus on the topic under discussion at the time. We also request that anyone wishing to ask a question limit themselves to one question at a time until other shareholders have had an opportunity to ask questions. Questions should be of a general nature as this is a shareholders' meeting. Customer or personal questions can be directed to one of the contacts on the back of our proxy circular. As we will be receiving questions through multiple channels, we appreciate your patience. If there are several questions on the same topic, we will group these together. We are endeavoring to respond to your questions during the meeting. However, any questions that cannot be answered during the meeting and that have been properly booked before the meeting will be posted with answers online as soon as practical after meeting on our Annual Report and General Meeting webpage. For those who are asking oral questions, if for some reasons we are not able to address your question during the meeting, please use the web chat to submit your question or reach out to the Corporate Secretary using the contact information on the back of the proxy circular. On behalf of your fellow shareholders, I thank you in advance for your cooperation. Before we turn to items of business, I want to take this opportunity to say a few remarks. As Chairman of the Board, it is a pleasure to serve the bank and you, our shareholders, by leading the highly qualified and engaged members of the Board of Directors who attended a record number of Board and committee meetings this year. 2020 will be remembered as the year COVID-nineteen forced the world into lockdown, adversely impacted livelihoods and economies and highlighted social and geopolitical injustices around the world. Over the past year, Scotiabank demonstrated its commitment to putting customers first, supported employees and communities and delivering for our shareholders. As we saw during this period of instability, the significant multiyear investments in people, processes and technology proved to be the right ones. The Board has worked closely with the bank's leadership team, and we are proud of the results achieved in this uncertain environment. We fully support our management team's priorities and their efforts to build a more resilient and diversified bank. I would like to take a moment to thank the entire Board of Directors, senior management and the more than 90,000 Scotiabankers around the world for their service and continued commitment to the support of the bank's various stakeholders during the difficulties we have all encountered this year. Despite the many challenges of 2020, the Board is optimistic that the bank will emerge from this pandemic stronger than ever. We have great confidence in our bank's future as a leading bank in The Americas and look forward to working with the team over the coming years to continue to put customers first, deliver for our shareholders and support our employees and communities. Before we turn to the first items of business, I would like to point out that the discussions during today's meeting may contain forward looking statements about the bank's outlook and objectives and our strategies to achieve them. The bank's actual results could differ materially from expectations discussed. There may also be references to non GAAP measures. The details of a warning regarding forward looking statements and non GAAP measures are on the webcast screen and can be found in the bank's first quarter report to shareholders. I'd now like to invite Scotiabank's President and Chief Executive Officer, Brian Porter, to address the meeting. Thank you, Aaron, for the kind introduction, and good morning, everyone. Welcome to our one hundred and eighty ninth Annual Meeting of Shareholders. I want to begin by extending my thanks to you, our shareholders, for your ongoing trust in the bank's leadership team and in our vision for the Bank's future. I also want to sincerely thank all Scotiabankers for their many efforts over the past year. Our team has demonstrated tremendous resilience and determination while delivering for our customers, our shareholders, our communities, and for one another. I know I speak on behalf of our Board of Directors and the leadership team in saying thank you and job very well done. Our Board, led by our Chair, Erin Regent, also deserves special thanks for their engagement and support during this difficult time. Their experience and wise counsel have been appreciated by me and certainly by all Scotiabankers. I also want to use this opportunity to recognize and thank the entire team at the University Health Network. UHN is Canada's top research hospital and was recently, for the third year in a row, ranked one of the world's best hospitals. It's my privilege to serve as Chair of the Board of Directors of UHN, and over the past year, I have seen team UHN's commitment, courage and compassion firsthand. Today, Canadians are united in our appreciation for all our medical professionals, doctors, nurses, administrators, ambulance drivers, paramedics and volunteers. You have earned our deepest gratitude and highest respect. Shortly after becoming CEO, in fact, during my first annual meeting, I outlined our plan to create shareholder value over the longer term. A plan to put customers first, build a winning team, and lead in the businesses and markets where we operated. We knew the decisions we had to make would not be easy. Consequential decisions rarely are. Strengthening the bank's foundation required us to make considerable investments to boost our digital capabilities and in our people, processes, technology and products. We also began to take steps to simplify our footprint through a series of divestitures, focusing on the countries where we could turn the dial for our customers and indeed our shareholders. While many of our divestitures were profitable operations, they did not produce acceptable risk adjusted returns. Each of these markets had low growth prospects, lacked scale, or we did not have a competitive advantage as a business. Our decision to sell profitable businesses that contributed approximately $500,000,000 of earnings for the bank was not an easy decision, but it was the right decision. Take Puerto Rico and El Salvador for instance. By exiting these two countries, which represented 0.3% of the bank's assets, we reduced the bank's gross impaired loans by 10%. Since 2013, we have exited 25 unrated or Southern Investment Grade countries and eight non core businesses. We redeployed approximately $10,000,000,000 of capital in geographies and businesses that were stable, higher growth and had a higher return on investment. In doing so, we have reduced operational risk and exposure to unrated and sub investment grade countries from 12% of earnings to just under three. Our acquisition in Chile strengthened our position in a highly attractive market. Here in Canada, we acquired Jarislowsky Fraser and MD Financial, which were in line with our strategy in terms of growing out our wealth business across our footprint. Each integration was completed at or ahead of the projected timeline and is financially contributing at or above our expectations. Looking forward, we see meaningful growth opportunities in our core markets here in Canada, The United States, Mexico, Peru, Chile, Colombia and The Caribbean. Today, these countries generate more than 95% of the bank's earnings. The bank's repositioning program is largely complete and our overall financial and operational strength has never been better. We reearned the $500,000,000 that we gave up through our divestitures in just one year, thanks to the strong performance in Global Banking and Markets, Global Wealth Management, and our treasury operations. The Bank's Q1 twenty twenty one earnings demonstrated the full earnings power of our repositioned and well diversified businesses. The Bank's first quarter earnings of $2,400,000,000 and earnings per share of $1.88 rebounded strongly. We saw improved performance in our P and C businesses and continued strong growth in our GBM and GWM earnings. Our return on equity was a healthy 14.4%, higher than our medium term objectives and trending towards our goal of 15%. The strong ROE of more than 17% in both our GBM and GWM businesses this quarter reflects the important investments we have made in both businesses. The bank generated operating leverage of 3%, a key measure of productivity, generating revenue growth in a challenging economic environment, while prudently managing expense growth. Our balance sheet and asset quality remains strong, reflected in a robust common equity Tier one ratio of 12.2%, liquidity coverage ratio of 129%, and a gross impaired loan ratio of 84 basis points. All of these factors contributed to our top of class share performance since the start of our fiscal year. They are further evidence that our strategy is working and our repositioning efforts are having their planned effect. We intend to build on our solid momentum throughout the balance of the year and beyond. As I noted a few moments ago, we also made considerable investments in our digital capabilities to drive efficiencies and give our customers a great banking experience. We are pleased with the bank's digital transformation and our progress against our digital targets. Across the bank, active digital and mobile usage is up almost 20% from last year. Digital sales account for more than 40% of retail banking sales, and self serve transactions are nearly 90% of all banking transactions. Our investments are paying a digital dividend. As an example, we have seen significant cost savings when we digitally onboard a customer. Customers are also seeing the benefit. For example, the time taken to open an account in Colombia dropped from approximately thirty minutes to less than ten. Your bank will continue to make the appropriate investments to ensure we maintain our digital competitive advantage. A lot has been said in recent years about the purpose of the corporation and the role that businesses such as ours play in society. At the bank, we have long believed that our purpose is twofold. Firstly, we provide profitable solutions to meet the needs of our customers and future customers. And secondly, as an important part of the economic and social fabric of every country in which we operate, we serve as a driver of broader economic growth. We act out our purpose every day, investing in and expanding our business, standing by our customers in good and challenging times, creating well paying jobs and opportunities for our employees, and working to ensure that our society is one where everyone has equal access to opportunities to build a better life for themselves and their families. I appreciate the way the CEO of Microsoft recently put it when he said, and I quote, In order to have the pie distributed evenly, the pie first has to grow, and it should never stop growing. To remove barriers and provide greater access to opportunity last January, we launched Scotia Rise. Over the coming decade, through Scotia Rise, we will be making significant investments to help young people reach their full potential, enable newcomers to Canada to build a life for themselves and their families, and eliminate obstacles to inclusion throughout society. As a leading bank in The Americas, we benefit enormously from diversity. In fact, we aspire to be the bank of choice for the diverse communities we serve from both a customer and an employee point of view. We know that a workplace truly reflects the communities it serves and produces the strongest results. That is why we act so adversely to discrimination of any kind. Discrimination has no room in our bank or in our society and we will continue to oppose it at every opportunity. Last year, Mark Mulrooney, Vice Chair of Scotia Capital, and I were proud to join the Board of the Black North Initiative, a group dedicated to the removal of anti Black systemic barriers. We will continue to speak out against all forms of discrimination in partnership with groups like the Black North Initiative, whenever and wherever they arise. We are also committed to raising the bar on environmental, social and governance matters more broadly, with investments and commitments which will maintain or indeed strengthen our ranking in the top 1% of global financial institutions in terms of corporate governance practices promote economic resilience in our communities, and improve environmental sustainability and enable a transition to lower carbon emissions. Most recently, I challenged the bank's leadership team to map out a concrete plan with interim targets, timelines, and transparent reporting to reach net zero carbon emissions by 02/1950. This is a goal we will achieve and we are committed to providing annual updates on our progress. As we have seen over the past year, decisions we make matter. Our decisions today as Scotiabankers affect not only the future of the bank, they affect the future of the countries in which we live and work and determine the kind of world the next generation will inherit. Looking at the situation here in Canada, the COVID-nineteen pandemic has, of course, been a massive shock to our economy. But in reality, we have been experiencing slower growth prior to the pandemic. Over the past twenty years, Canada's annual GDP growth has averaged less than 2%, and we're not the only country. Advanced economies around the world have struggled with economic stagnation. There are a number of reasons for this: convenience and complacency being chief among them. As a country, we should not accept the 2% growth trap. We have an opportunity today to pursue policies that ensure that Canada does not just go back to pre pandemic growth, but achieves an even higher and better growth for a sustained period. The Bank has been researching and advocating on this topic for some time. All Canadians benefit from a strong growing economy, which is why we are proposing three concrete recommendations that would have a direct and positive impact on Canada's GDP, increase the number of working Canadians, and contribute to a stronger, more prosperous Canada. Firstly, we are recommending an annual top up of $5,000 per child to the Canada Child Benefit. We are also advocating for a significant increase to the Canada child tax credit to allow parents to fully deduct the cost of preschool child care. While child care costs vary dramatically across the country, increasing the tax credit to $20,000 per child per year should cover the cost of day care in every Canadian city. More often than not, women are the ones who set aside their career ambitions to ensure their children receive quality care and education. Providing greater flexibility to families to find childcare arrangements that are best suited for them is good for women, it's good for families, and it's good for the country. Secondly, we are proposing a one time matching grant for businesses to make capital investments in machinery, equipment and intellectual property. For example, a small business could digitize their business and enhance their ability to reach customers. A medium sized business might want to retool a factory to be more efficient. Or a large business looking to reduce energy costs and improve their environmental footprint might utilize funds to build out carbon capture and storage or electrification. Capital investments improve Canada's productivity and drive innovation. These two policies could make a meaningful impact on Canada's economic trajectory. In fact, our investment incentive proposal alone could boost business investment as a share of GDP by up to 1%, adding $100,000,000,000 to Canada's economy over a five year period. Thirdly, Canada's GDP growth could be boosted by the elimination of interprovincial trade barriers, something which we have been advocating for many years. A working paper produced by the IMF estimates that complete liberalization of internal trade in goods can increase Canada's GDP per capita by four percentage points per annum. Canada is a trading nation. We produce goods and services wanted by partners around the world. And we have been a leader in promoting free trade and open markets. Let's prioritize free trade between provinces and territories in the same way we prioritize free trade between countries. There is considerable evidence that these three policy recommendations would play an important role in strengthening our economy at this critical time, And they would help ensure Canada does not fall back into the 2% trap. These policies are common sense, they make good business sense, and they benefit all Canadians. Let me close with this. Several weeks ago, I was touring the site of Scotiabank's new head office here in Toronto. Despite the enormous challenges presented by the pandemic, construction has progressed exceedingly well. Traveling to and from the office each day, I watched as a deep pit in the ground was transformed into an impressive tower. During the tour, I was reminded that we are a country full of people who are capable of imagining and creating great things, from skyscrapers to the next generation of telecommunications technology to lifesaving vaccines. We have an opportunity today to decide what future we're going to build. Let it be a future of dynamism, growth and prosperity, one that is truly inclusive and benefits all Canadians. Thank you for your time. Thank you, Brian. We will now proceed with the first item of business as set out in the notice of meeting. Copies of the annual report that contains the bank's 2020 financial statement and orders report therein were sent to shareholders in advance of this meeting. You can also obtain a copy of our 2020 annual report on our website at scotiabank.com. Julie, have we received any questions related to the financial statements? And I should note that Raj Viswanathan, our Group Head and Chief Financial Officer, is joining us by phone. Aaron, we have not received any questions on our financial statements. Thank you. Seeing no questions, we will proceed with the next item. We'll now proceed with the election of directors. The Board's role is to oversee management of the bank, ensuring that strong corporate governance practices are in place. We believe good corporate governance is an essential foundation for strong, long term performance and fundamental to our success. Our directors are regional, national and international business and community leaders. As a group, they have been selected based on their collective skills and ability to contribute to the broad range of issues the Board considers when overseeing the Bank's business and affairs. I'd like to thank all of our directors for their commitment, hard work, leadership and counsel to me. I'd like to acknowledge the contributions of Tif Macklin, Indira Sermarascarra and Charles Dallara for their many years of valuable service to our Board. As Tif stepped down following his appointment as Governor of the Bank of Canada this past spring. Endeavor is not standing for reelection pursuant to our Board term limits, and Charles has decided not to stand for reelection. Their insights and expertise help to position the Bank for success, and we wish them all the best. This past year, we're delighted to welcome two new directors to our Board, Lynn Patterson and Kaylin Rovinescu, who are standing for election at today's meeting for the first time. Lin has a strong background in monetary policy, risk management, financial services and capital markets. Kalin brings his broad global experience and depth of expertise in corporate strategy, growth, shareholder value creation and environmental and social responsibility. We are very fortunate to have Lynn and Kaelin join our Board. The Board of Directors has fixed the number of directors to be elected at 12. I confirm that all nominees are eligible for election. We believe we have a Board with the right combination of skills, experience, and integrity to provide strategic counsel to management and oversee the bank's business and affairs. I'll invite Julie to read the names of the nominees standing for election and make the motion for the nominations for directors. Thank you, Aaron. I nominate each of the director nominees, as set out in the management proxy circular, to be a director of the bank until the close of the next Annual Meeting of Shareholders. The nominees for election as directors are: Nora O'Freiter Guillermo Babbitt Scott Bonham Lynn Patterson Michael Penner Brian Porter Eunah Power Erin Regent Kalin Rovanetsky Susan Siegel Scott Thompson and Benita Warmbold. Thank you. The Board looks forward to serving you, our shareholders, this year. You will find information about each of our nominated directors in the Bank's management proxy circular on pages 14 to 21 in the English version and pages 15 to 21 in the French version. Julie, have we received any comments or questions? Aaron, we have not received any questions. Seeing none, I declare the nomination to the appointment of auditors. At the Annual Meeting held on 04/07/2020, shareholders reappointed the firm of KPMG LLP as the shareholders' auditor of the bank for the 2020 fiscal period. The Board recommends that KPMG LLP be appointed as the auditors of the bank until the close of the next annual meeting. I now ask Julie to make this motion. I move that KPMG LLP be appointed as the auditors of the bank until the close of the next Annual Meeting of Shareholders. Brian, can I ask you to second the motion? I second the motion. Thank you. Julie, have we received any questions on this item? We have not received any questions, Aaron. As there are no questions, this is the second item of business to be voted on. For those of you who have not yet voted, please vote now by selecting either the option four or withhold. The next item of business on the agenda is the advisory vote on the bank's approach to executive compensation, commonly known as say on pay. Our approach to executive compensation is described in detail in the Compensation Discussion and Analysis section of the Management Proxy Circular on pages 67 to 116 in the English version and pages 131 in the French version. Because our annual say on pay is an advisory vote, it is not binding upon the Board. However, the Board and the Human Resources Committee will take the outcome of the vote into account, together with other suggestions that we receive from you when considering future executive compensation arrangements. Over the past few weeks, Scott Thompson, our Chair of the Human Resources Committee, and I have had numerous meetings with shareholders on this matter. We have appreciated the dialogue and the support we receive from our shareholders. We recognize that 2020 was an exceptional year, and we remain committed to continuing to engage with our shareholders on this matter. The resolution on the approach to executive compensation is set out in the management proxy circular on Page seven under the heading Advisory Vote on our Approach to Executive Compensation. I now ask Julie to make the motion to approve the bank's executive compensation approach. I move that the resolution set out in the management proxy circular under the heading Advisory Vote on our Approach to Executive Compensation be passed. Okay. Thank you, Julie. As a shareholder and the Chairman, I'm pleased to second the motion. Julie, are there any questions on this motion? Yes, we have received one question. We have received a comment from Willie Gagnon from Medac, who notes that he acts on behalf of the Education and Defense of Shareholders, Medac, and we invite, as every year, shareholders to vote against the bank's compensation policy. It goes without saying that the remuneration that is provided by this policy is very much exaggerated. Okay. Thank you for that comment, Willie. As there are no other questions, if you have not already voted, please vote now by selecting the option for or against. The next item on the agenda are the shareholder proposals. This year, three shareholder proposals were submitted for a vote at today's meeting. All three proposals are from the movement to education et defence de actioneres, which you will find beginning on Page 27 or Page 28 in the French version of our managed proxy circular. The management proxy circular includes statements by MEDAC in support of their proposals as well as the bank's response. Shareholders and proxy holders will be given an opportunity to ask questions related to the proposals after the proposals have been moved. Mr. Willie Gagnon of Medac is joining us today by phone. Bienvenue, welcome. You're welcome to address the meeting with any comments on these proposals and to move the proposals. Mr. Chairman, can you hear me? Yes, we can hear you. Very good. Thank you. My name is Willie Gagnon. As is the case each year, I am speaking on behalf of MEDAC, the Movement Education and Defend des Actionaires, which is celebrating its twenty fifth anniversary this year. Today, I have three proposals that are being put to a vote. We had submitted seven proposals to all major banks, including Scotiabank. And we had also submitted two additional proposals to Scotiabank, which are before you today. Proposal number one, on the circular economy, it is proposed that the bank reports on its loans over the past several years in support of the circular economy. This is a proposal that is being put to the vote today. We have not been able to agree with the bank on measures that other banks have taken, which have led us to withdraw those proposals. The National Bank and the Bank of Montreal have adhered to the principles for responsible banking. This is a UN initiative on the circular economy in which it set out the principle according to which indicators financial indicators should be developed to allow for measuring the bank's degree of involvement through its investment and loan portfolio in the circular economy. And that is why that proposal was not put to a vote at those two banks' meetings. We understand that discussion on the circular economy is less advanced than discussions on other issues such as carbon emissions and the greenhouse gases. But we would have wished the bank to adhere to this UN initiative as two other banks already have done so. And in that case, we would not have requested that this proposal be put to a vote. So we would invite all shareholders to support this proposal, and we would invite the bank to adhere to the principles for responsible investment. I would have liked to hear you, Mr. Chairman, respond on this issue. So this is for proposal number one. I don't know if you want me to speak to all three proposals at this point? Yes, please. I think it would be best if you speak to all three. Very good. Shareholder proposal number two follows on a proposal that we have already made on disclosure of the equity ratio, that is the ratio between the compensation of the best paid member of the bank and the average remuneration of employees. We support we ask our shareholders to support this once again. And the third proposal that is being put to a vote today deals with a diversity target, that is to say, the representation of women on the Board of Directors for the next five years. That proposal was made to all banks in the past. This year, we have made it to four banks, and we've agreed that it not be put to a vote at the meetings of those banks that have agreed to including in their internal bylaws the principle of parity. That is the case for the National Bank and CIBC. We would have been happy if Scotiabank had enshrined this concept in its own bylaws. We would invite you to do so, and we would invite all shareholders to support our three proposals. As well, we had submitted other proposals. I don't know, Mr. Chairman, if you want me to address those right now or if you would like to put the three motions to a vote before I address the withdrawn ones. Let's put the three proposals to a vote now, and then we can discuss the other ones. Very good. Well, thank you, Mr. Gagnon. We appreciate the thought that you put into these proposals. And as we've discussed with you, Scotiabank continues to be very committed to the ESG issues such as those raised by these proposals. And we have demonstrated our stakeholder commitment to these issues and have set them out in the management proxy circular responses to your proposals. And it's also further expanded upon in our ESG report. Our strong stakeholder engagement is based on our continuous improvement philosophy and listening to our stakeholders year round, and this will continue. Julie, have we received any comments or questions on these proposals? Aaron, we have not received any questions on the shareholder proposals. You. Seeing no questions, if you have not yet voted, please vote now by selecting the option four, against or abstain for the proposals one, two and three. Mr. Gagnon, if you'd like to comment now on withdrawn proposals. Thank you, Mr. Chairman. Louis de Gagnon, again, on behalf of Medac. We had submitted nine proposals and the three proposals that have been put to a vote illustrate the fact that we have not been able to agree on all issues. But for the six remaining proposals, we have had excellent dialogue with the bank, and we were able to agree that those six proposals not be put to a vote as can be read in the circular. We had submitted a proposal dealing with targeted greenhouse gas emission reductions. So we know that, first of all, you have adhered to the TCFD as well as to the principle that quantitative indicators should allow for measuring the bank's involvement in industries that contribute to global warming. So on the basis of that commitment, commitment to that principle, we have agreed that, that proposal not be put to a vote. And I would invite shareholders to read your response in the circular. We had made a proposal in honor of our twenty fifth anniversary, a proposal that enshrined all the values we have been defending since the inception of MINDAC on the purpose of corporations and society. And we have agreed not that, that proposal not be put to a vote based on your commitment to enshrined in the Governance Committee Charter the responsibility for ensuring supervision of the bank's purpose and its realization. We are happy that you've included this in the Governance Committee mandate. We had made a proposal dealing with virtual annual meetings, and we are happy to be able to speak this year. We are also happy that all shareholders, in fact, are able to speak, and we are happy with your commitment to the principle that virtual meeting should reproduce to the greatest extent possible face to face meetings. There is still a lot of work to be done, especially on procedures to designate proxies, having a virtual registration table at the virtual door of a meeting, such as the one we're having today, but discussions are live on this. We had made a proposal on the Human Resources Committee, and we're happy to see that you have included employee health, safety and wellness within the mandate of the Human Resources Committee. That was the purpose of that proposal. And this has, in fact, been done elsewhere, including at National Bank. We had made a proposal on the issue of burden sharing in the context of the current health crisis, and we are happy with your response in terms of detailed disclosure and references to where such information can be found. So I would invite shareholders to read your very detailed response, including page numbers and references. And we had made a proposal on climate change, and we are happy with, once again, that you have joined the TCFD. We had made a proposal on the Board's and the compensation committee's discretionary power of oversetting compensation, and we are happy with the level of disclosure that you have provided in your response. We believe that this type of disclosure should become the norm each year for all banks. And we are specifically interested in knowing based on which criteria that discretionary power is exercised and how it is managed once it is triggered. So overall, we're relatively happy with the dialogue we've had with the bank, with your openness, with the quality of the responses to our shareholder proposals. And we will be back in future, and we look forward to continued positive engagement with the bank. Thank you very much for all the time you have granted us. Mr. Chairman, we had sent many proposals. This was exceptional, but we believe that this is an exceptional year. Once again, thank you very much for your attention. Thank you very much, Mr. Huygensho, and appreciate your comments today and appreciate the constructive engagement that you have with the bank. And we look forward to continuing that discussion in the years ahead. Having now completed the formal items of business as said under the notice, the voting portholes are now closed. Ladies and gentlemen, the scrutineers have completed the preliminary tabulation of the votes cast in respect of each item of business and have sent them to us. I will now ask Julie to speak to the preliminary report on voting results. Thank you, Erin. We wish to report that the vote return is approximately 54%. I am pleased to inform you that each of the 12 nominees for director named in the management proxy circular has been elected and received in excess of 92% votes in favour. The auditors were reappointed. Approximately 98% voted in favour of KPMG LLP. The advisory vote on the approach to executive compensation was passed and approximately 61% voted in favour. And the shareholder proposals were defeated. On proposal number one, approximately 84% voted against. On proposal number two, approximately 86% voted against. And on proposal three, approximately 93% voted against. Thank you, Julie. The final voting results will be available after the meeting. We will also issue a press release as required by the Turnoff Stock Exchange and post the results on the bank's website. That concludes the formal business of the meeting. We will now take questions from shareholders and proxy holders. In keeping with our past practice, I'll ask Brian to preside over this section of the meeting. Julie will be directing the questions by stating the name of the shareholder or proxy holder for oral questions received and by reading out the question received via the web chat. Julie? Thank you, Erin. Our first comments, Erin, are for you, and they come from a shareholder, Ms. Patricia Horst, who submitted them in advance of today's meeting. Ms. Horst voiced support for a goal of gender parity for the banks, Board of Directors, employees, and a goal of 11% for the representation of visible minorities on the Board and in our workforce. She also expressed a desire to see the pay gap between the highest and lowest paid employees at the bank reduced. Aaron? Okay. Thanks, Julie. And thank you, Ms. Horst, for your question. There's really two things that you're touching on here. One is diversity and inclusion, and the second, it relates to compensation. On diversity and inclusion, diversity and inclusion is a priority at the highest levels of the bank. And to support this, our CEO serves as the executive sponsor of the bank's Global Inclusion Council. We have a Board diversity policy, which aspires to have each gender comprise at least 30 of its members. This year, 42% of our nominated directors are women. We have also updated our diversity policies this year to include additional criteria, including sexual orientation, members of visible minorities, aboriginal peoples and peoples with disabilities. Scotiabank is committed to reflecting in its employee base the diverse communities we serve as demonstrated by our renewed diversity strategy with a focus on underrepresented employees. Our strong representation of women across our organization is evident by right now, 56% of our workforce are women. We also have an overall representation rate of visible minorities in our workforce of 24%. While our work to build a truly inclusive organization is never complete, we are pleased with the progress we have made. In a recent employee survey, where 70,000 Scotiabankers responded, 94% believe Scotiabank is committed to building an inclusive work environment. On compensation matters. When it comes to executive compensation, our philosophy is to pay our employees based on market compensation for the role and also their performance and the performance of the bank. This philosophy applies at all levels of the bank. As we operate in numerous geographies and offer a range of financial services in each market, This philosophy ensures we pay fairly and competitively in each market for the skills and responsibilities of each role and also supports our performance driven workplace culture. We therefore believe that adhering to this philosophy is a more meaningful way to ensure the compensation of our employees is appropriate. Thank you. Brian, we have received a question from a shareholder, William Manzia. The question is, the bank's main Canadian competitors have USA banking activities, including with branches, in personal and commercial banking locally? Some examples they note are TD, BMO and RBC. Is it not time for Scotia to seriously consider acquiring a U. S. Presence of importance and U. S. Personal and commercial banking, noting about 70% of our trade is with The U. S? Well, thank you very much for the question. And the management team and the board spend a lot of time on capital allocation and where we allocate capital to build out our businesses in terms of people, process, technology and products. We've looked at a number of different opportunities in The U. S. I would highlight The U. S. P and C banking market is the most competitive in the world. Banking penetration is well through 200%, so that means basically every American has two bank accounts. If you look at our footprint in Latin America, banking penetration varies anywhere from 30% to 70%, 30% in Peru, for example, 70 in Chile. The populations in Latin America tend to be younger. Average age is 29 versus 42 in Canada or The U. S. And our returns have been better out of our markets outside Canada and the returns are better than they are in The U. S. So if you look at returns on equity, which matter for shareholders, the returns that we garner from our markets in the Pacific Alliance and The Caribbean tend to be higher in a normalized year than they would in The U. S. Having said that, we have a significant business in The U. S. In terms of our wholesale business, which is in Global Banking and Markets division. The business is very profitable, makes 800 to $900,000,000 on a normal year. The return on equity would be in the high to mid teens and is a very good business. That business is extending corporate banking and investment banking activities to the Fortune 500 companies, trading different securities for asset managers around the globe and that's been a very good business for us and has continuity for Canadian customers and customers throughout our Latin American operations too. So in terms of capital allocation going forward, the return on equity in the American P and C business is mid single digits to low double digits. So the return on equity is better in the markets where we are than it is in The U. S, and I don't see us changing that. Thank you. Brian, the next question that we have received is from our shareholder, Jeff Carlson. Jeff notes, I believe the use of company earnings to repurchase its own shares, I. E. Share buybacks, is a poor use of capital and does not demonstrate a vision of long term growth for BNS. At worst, when such purchases are made, the shares may be purchased at overvalued market prices, which therefore destroys shareholder value. Doesn't it make more sense to deploy this capital in ways that will actually grow the company or to return these earnings directly to shareholders, who as shareholders have risked their own money in the form of higher or special dividends. With this in mind and with current federal restrictions on buybacks aside, my question is, why does the board continue to adopt the long term policy of repurchasing its own shares? Thank you, Mr. Carlson, for your question. This is a topical question because we get asked the question a lot by our large institutional shareholders which represent a number of different organizations. There's four different methodologies in terms of capital allocation. We can go out and acquire a business, which we've done on occasion when it fit our strategy. We can invest in our own business, which we're doing and continue to do, again, it's the theme of investing in people, process, technology and products, which we will continue to do. We can give capital back in the form of cash dividends, which our shareholder base likes and it accounts for a good part of the return over an extended period or we can buy shares back. We've used the share buybacks on occasion, not a lot in this organization because we believe that we want to grow and to grow a business, good companies invest in difficult times and they invest in good times. We kept our investments up during the course of last year which was a difficult time. Our investments in technology for example were 12% of our revenues which would be leading industry for global banks, and that's again on our philosophy of good businesses invest in difficult times. So our primary focus will be on investing in our own business. There's not anything that I have on my desk that we want to acquire. That may change. But we will keep share buybacks in our quiver from time to time. If we do have excess capital, we will buy shares back but not in a vast quantity. It will be more of a housekeeping measure. Thank you. We have a shareholder who's on the phone, Emilia Meister from Some of Us. Operator, could I please ask you to connect to Emilia Meister so Emilia may address the meeting. Thank you. Thank you. Can you hear me? Yes, we can. Wonderful. Mr. Porter and the Board of Directors, I represent hundreds of members of some of us who are also Scotiabank shareholders and customers who have expressed concern over Scotiabank's climate policies. We know that the Canadian banking industry is starting to be held account for its role in the climate crisis, including Scotiabank through the funding of high carbon industries. And we are seeing shareholders at other banks calling for bolder action. Last week, the climate shareholder proposal, the same one filed here at Scotiabank and withdraw the withdrawn before voting occurred, garnered 32% of shareholder support despite the major proxy advisory firms not supporting the proposal. We are heartened to see the steps that Scotiabank has already taken, including joining PCAF and committing to making emissions reductions targets and being accountable to your shareholders on these targets. However, shareholders still don't have a firm time line for when these targets will be made. With shareholders and clients looking to our bank for leadership, what timeline can you give us for releasing these interim emission reduction targets? Thank you. Emilia, thank you very much for the question and we appreciate the dialogue that we've had in the last few months with you and your colleagues. This is a complex issue as you point out and one that, as I said in my comments, that I and the senior management team of the bank are spending a lot of time on. Let me say a couple of comments. We certainly agree with the Paris agreement and recognize the role that the global financial sector and banks such as ourselves play in service of achieving these critical goals. In terms of we do have a plan and we're working on it. It's complex and I want to just give you some idea of what we're doing as an organization and then what we're doing in terms of our lending commitments but our climate commitments are comprehensive and address climate risk and opportunities both for our customers, shareholders and employees. The plan includes, ensuring robust climate related governance and transparency in reporting is there for our shareholders to integrating climate risk assessments in our lending, financing and investing in our asset management business. So we are also working on decarbonizing our own operations. So if you look at the bank's own footprint, we've reduced our GHG emissions 20% over the last four years and we have plans to reduce those even further. And for example, we are committed to securing 100% of our electricity needs from renewal or non emitting resources by 2025. So it gives you some sort of thought that's gone into this process for us in terms of ESG. It's priority for the bank. I'm not going to give you an exact firm timeline today, but we're happy to meet with you outside of this forum because we're taking a measured, thoughtful approach. We're not kicking the can down the road, and these initial steps in terms of measurement are really important, and for us, with a balance sheet of close to 1,000,000,000,000 in terms of assets where our commitments extend anywhere from three to five years, depending on whether they're a mortgage for a Canadian household or financing a project in Latin America or financing a manufacturing operation in The U. S. These are extensive. We have to look into carbon intensity for measure of output from each of these organizations. So we're committed to this. You'll hear from us, in terms of our timeline. We're not quite there yet because we want this to be thoughtful and we expect to be held accountable to this and we would report on this at least annually to a form like this. So I appreciate the feedback, the question and the dialogue we've had with you and your colleagues and we look forward to it going on from here. The next question that we have received is also from Jeff Carlson, who asks, the board and senior management of BNS seem to be focused on diversity and inclusion targets as ends in themselves. We have also seen a similar focus in at least one of today's shareholder proposals. However, there is little said about something much more important, namely building an enterprise with the most talented and competent personnel, regardless of what they might look like, where they might come from, and what their personal beliefs may be. What we tend to hear instead is platitudes and virtue signalling, both of which nothing. With this in mind, my question is, what is the Board and senior management doing to ensure that the best qualified and capable people and only the best qualified and capable people are working for BNS at all levels across the enterprise? Okay. Thank you, Jeff, for your question. And this ties into the question that, Erin was asked earlier on diversity and inclusion. And, this is a key issue and an important issue and it starts with we want to be the bank of choice for the diverse communities we serve and we also want to be the employer of choice and by virtue of the bank's footprint throughout The Caribbean and Latin America, that's been a benefit to us. We've learned from having a diverse workforce and a skilled workforce. So just some stats and these are worth repeating. Aaron gave you some of them. 39% of our workforce of 90,000 people identify themselves as a visible minority. That's a key strength for the bank. 56% identify as women. 5.7 identify as LGBTQ. And just as a note, we hire summer students every year, and we hope they go on to an expanded full time job in this organization. 50% of our student hires are black, indigenous people or people of color. So we have ambitious D and I targets here in Canada and throughout our footprint. It's led to a more diverse bank and it's no doubt in my mind that it's been a strength for our bank and we pride ourselves in terms of what we do on an HR basis for our employees in terms of skills, training, for leadership development and it goes on and on and on. So we've got a great skilled workforce of 90,000 people and as I said in my address today, my hats go off to them. They performed above and beyond the call of duty in the last year and we are indeed very proud of them And we are as strong as our people that work for us. And we've got a great team at Scotiabank, and again, we're very proud of them. And thank you for your question. Aaron and Brian, we have not received any further questions. Okay. Well, thank you for your questions. Since there are no further questions, ladies and gentlemen, that does conclude this meeting. I'd like to say a sincere thank you to everyone who made today's meeting possible and allowed us to achieve our goals of keeping everyone safe while hosting a meeting that promotes shareholder participation. There are many Scotiabankers behind the scenes as well as translators and the production team that I'd like to acknowledge. I'd also like to thank you, all of our shareholders, for attending our Annual Meeting. I wish you and your loved ones well during these uncertain times as we continue to be there for each other and support our health and safety and that of our communities. This meeting is now terminated. Thank you.