AGM 2017

Apr 6, 2017

Ladies and gentlemen, the meeting is about to start. Please take your seats now. Mesdames et messieurs, l'assemblée est sur le point de commencer. Veuillez prendre vos places maintenant. Mesdames et messieurs les actionnaires, bonjour. Ladies and gentlemen, shareholders, hello. I'm Kathleen Taylor, and I have the privilege of being Chair of the Board of the Royal Bank of Canada. I'm pleased that so many of you could join us here in the room today. Many more are with us on the webcast. As notice of the meeting has been duly given and a quorum is present, I call the meeting to order. You may address this meeting in English or in French. If you'd like a translation headset, please raise your hand and an attendant will assist you. English is on channel 2, and French on channel 10. After my introductory remarks, Dave McKay, our President and Chief Executive Officer, will make a presentation, followed by the regular items of business, including the election of directors and the appointment of the auditor. Shareholders will also be asked to approve a non-binding advisory resolution on our approach to executive compensation. We will then consider shareholder proposals and deal with any other business, including questions from shareholders. Please note the caution posted on the screens. At this meeting, we may make forward-looking statements which involve certain assumptions and have inherent risks and uncertainties. Actual results could differ from these statements. As always, we welcome questions and comments from shareholders. Some guidelines are set out in the agenda that you received this morning. Please keep your comments brief. In fairness to other shareholders, we ask you limit your remarks to just a few minutes and speak only once to each matter that comes before the meeting. At the appropriate time, if you would like to ask a question, please proceed to a microphone. When you are called upon, please start by giving your name and tell us whether you are a shareholder or a proxy holder. Before we begin, I would like to take a moment to introduce the others who are here with me on the podium today. From your right to left, we have Rod Bolger, Chief Financial Officer, Dave McKay, our President and Chief Executive Officer, and Karen McCarthy, Vice President, Associate General Counsel, and Secretary. I will act as Chair of the meeting, and Karen will be our Secretary. Tina Pacifico and Joe Chirico, officers of our transfer agent, Computershare Trust Company of Canada, will be our scrutineers. Also present are members of our board and senior management team. Two of our current directors, Geoff Beattie and Ed Sonshine, are not standing for re-election today. Each of them has made an outstanding contribution to our board. So before proceeding with today's business, I would like to take a moment to pay special tribute to them. Geoff joined the board in 2001, and during his tenure, has made a strong contribution as a member of our audit, human resources, and governance committees. He also served as Chair of our risk committee from 2010 to 2016. His leadership and experience have been great assets to RBC. Ed joined our board in 2008 and served with distinction as a member of our audit, governance, and risk committees. Over the years, he has represented the best interest of shareholders with professionalism and dedication. Thank you, Geoff and Ed, for your strong contribution and dedicated service. At RBC, we regard good governance as a business imperative, establishing structures and processes that drive RBC to meet its objectives and achieve long-term sustainability. Central to our role as your board is our responsibility to ensure that RBC has the right strategy, risk management, and talent to deliver long-term value for shareholders. The continued superior performance of RBC, including the ongoing successful integration of City National, demonstrates that having the right strategy is critical to our success. Since we met with you last year, your board of directors has maintained its strong focus on ensuring that business decisions and initiatives align with RBC's risk appetite. Equally essential to the bank's success is the leadership of a talented executive team backed by dedicated employees to execute our strategy with excellence. In that connection, we were pleased in 2016 to announce the appointments of Rod Bolger as Chief Financial Officer, and Mike Dobbins as Head of Strategy and Corporate Development. Early in 2017, we announced the appointments of Jennifer Tory as Chief Administrative Officer and Neil McLaughlin as Group Head Personal and Commercial Banking. And just last week, we announced that Helena Gottschling will assume the role of Chief Human Resources Officer, succeeding Zabeen Hirji. Zabeen has been a valued member of our executive team for many years, and we are all grateful for her tireless work to help RBC become one of the most respected employers in the country. Together, these new appointments represent well over a century of financial executive experience, demonstrating the strong pipeline of leaders within RBC to drive both short and long-term performance. Your board's high standards of governance continued to receive recognition this year, with RBC winning Best Overall Corporate Governance International Award at the Corporate Governance Awards in New York. But continuous improvement has always been part of our commitment. In 2016, we worked with an independent third-party consultant to identify the skills and experiences that will be required on the board to support the future strategic objectives of RBC. From this refreshed perspective, the board adopted a new competency matrix, sharpening our focus on the talent RBC needs on the board going forward. Before moving on in the agenda, I'd like to extend a special welcome this morning to the students from Emery Collegiate in North York and their teacher, Corrine Thompson. Corrine is a former RBC employee, and we're pleased to have grade 11 and 12 students from Emery's financial and accounting classes joining us today to see how their coursework is applied in the real world. RBC is passionate about supporting our next generation of young people and investing in your future. So welcome, and thank you for coming. Now it's time to hear from Dave McKay about the bank's performance and its future outlook. Dave, over to you. Well, thank you, Katie, and welcome to the Sony Centre and our 148th annual shareholders' meeting. 2017 is, of course, a year of celebration as we join together in marking Canada's 150th anniversary. As we saw in the video earlier, we've got millions of reasons to celebrate. I recently received a letter from a mother in Gatineau. Her son, Adam, had been chosen to receive CAD 150 as part of our Make 150 Count program and was invited to make a difference in their local community. She wrote of her huge pride as he put on his best suit and tie and went down to the branch to receive his award. Adam was inspired by the mission of the Boys & Girls Club of Ottawa. He decided to use his CAD 150 to arrange a special trip for them to go to the movies. Meanwhile, in Guelph, Maya, a nutrition student, used her CAD 150 to make and deliver food baskets to low-income families in her community. Here in Toronto, Damar, a grade 11 student, is making his 150 count by using his skills to set up a workshop for kids in grades 7 and 8. He is helping them design and print their own T-shirts, and on the theme of celebrating Canada, is donating the proceeds to SickKids Hospital. Damar is one of the students from Emery Collegiate in the audience today, and I would like to join Katie in welcoming him and his classmates to our annual meeting. These stories and the thousands of others like them show the passions, hopes, and ambitions of our young Canadians and how, when they are empowered, they can really make a positive impact on their communities. In this, Canada's anniversary year, it is right that we toast the successes of the past and present. RBC has been an essential part of that success. Since our last AGM, Canada has enjoyed steady economic growth, and we have proven to be a beacon for the world in our welcome of refugees. Excuse me. No wonder, perhaps, that Canadians continue to perform well in the World Happiness Report. At the same time, the world has changed since we last met. The rise of populist politics around the globe is a sure signal of shifting tectonic plates. Of communities and societies disrupted by technological change and suspicious of immigration. Of people who feel alienated and ill-served by elites, the government, the media, and big business. To some extent, Canada has been insulated. We are held up as an example for others to follow, and it is said that liberty has moved north and the world needs more Canada. We should rightly be proud of all the attention in our anniversary year. We should celebrate the richness of our nation, our diversity, our resources, and our pioneering approach to innovation. But as the world looks to us and we look in at ourselves, we must not be complacent. Especially, we have to be alert to pressing issues here at home. We need to consider how to prepare a workforce that is adapting to rapid digitization and facing huge transitional shifts, most particularly among the young. We must make sure we continue to create the jobs that will drive the economic growth that we need to secure our future prosperity. We must continue to advocate for global trade. Even as the world turns inward, we need to be an exporter of our ideas and resources and everything in between. The future for Adam, Maya, and for you, Damar, and your classmates should be a Canada that looks outwards. A Canada that is confident in its role on the world stage. At RBC, we have that confidence. We call it our collective ambition. It articulates our purpose to help clients thrive and communities prosper. It outlines our strategic goals, which demonstrate our diversification by client segments and by geography. In Canada, to be the undisputed financial services leader. In the U.S., to be the preferred partner to corporate, institutional, and high net worth clients and their businesses. To be a leading financial services partner valued for our expertise in select global financial centers. Our collective ambition underpins our vision to be among the world's most trusted and successful financial institutions, because how we succeed is just as important as success itself. Acting with integrity, being accountable, these are all at the foundation of our corporate culture, and these values are personified by our employees. That commitment to doing what's right helped us earn the trust of our first clients in 1869 and continues to drive how we interact with our customers today. Since we last met, our collective ambition has united us on every front and helped us significantly improve our financial position, even after making the largest acquisition in our history in City National Bank. 2016 was a strong year for RBC. We achieved record earnings of CAD 10.5 billion, up 4% from the previous year, and delivered a return on equity of over 16%. We closed the year by building our common equity Tier 1 ratio back up to a very strong 10.8%, following the completion of the City National acquisition early in the year. We returned value to our shareholders through share buybacks and by increasing our dividend twice for a total of 5%. In 2016, our 10-year annualized total shareholder return reached 10%, well above the peer average of 6%. Throughout 2016, we added more clients and invested significantly in our digital strategy, setting us up for even greater future success, and our strategy is paying off. We've had an excellent start to 2017, posting record first quarter earnings of CAD 3 billion and delivering a return on equity of 18%. We also increased or announced an increase of 5% to our dividend. Our Canadian core banking business continues to underpin our success, and in 2016, we maintained our number one or two market position in all key retail categories. Today, we remain the leader in business banking with a 25% market share in both loans and deposits. Meanwhile, our strong capital markets business segment is consistently ranked as the number one investment bank and the top deal maker in Canada. Combined with our growing capital markets platforms internationally, this provides us with significant global reach to meet our institutional clients' needs. In 2016, we saw more cross-border deal flow than ever. Across all of our businesses, we aim to grow our relationships with our customers, allowing them to benefit from other parts of RBC. For example, our personal and commercial banking segment and our wealth management segment are increasingly working together to assist business owners with their succession and ownership transition plans. As the number one fund company in Canada, our asset management business continues to build on its momentum with Q1 sales accounting for a third of the industry. Yet sales alone are not enough. We have to always strive to exceed our customers' expectations. That's why our global asset management business was recognized this year as Morningstar's Steward of the Year. It's why Euromoney named us the best Canadian private bank for the tenth year in a row. That's why J.D. Power awarded RBC the ranking of highest in customer satisfaction among the big five retail banks last year, something we are very proud of. This demonstrates our commitment to our clients, and it shows the strength of our most powerful assets, the energy, commitment, and expertise of our employees. Colleagues who are showing their passion for their communities by volunteering, fundraising, and participating in record numbers. Employee engagement scores are currently at their highest level ever with 95% of our colleagues telling us that they are proud to work for RBC, an organization that is clear and confident in its purpose. Yet the media reports over the last few weeks characterizes an environment that is not consistent with our experience, our culture, or our values. It is not the RBC that I know, that our clients know, or that I have grown up in for nearly three decades. We track the client experience with diligence. Of the 2.4 million accounts we opened last year, less than 0.05%, or less than one tenth of a percent of clients escalated a concern about the way an account was opened, showing the value of the advice that our colleagues provide. I would like to take this opportunity to thank every one of my 80,000 colleagues. Thank you. They are the reason why we continue to earn our clients' trust each and every day. We know that we should never take this position for granted. In a fast-moving world, we consistently reevaluate our goals and objectives to ensure that we continue to serve our clients' best interests, and we seek constant feedback from our customers and colleagues. This has prompted us to focus on creating an organizational culture that is increasingly fast-paced, nimble, and client-focused. More than ever, we are using small, diverse teams and agile principles in our product development. This approach encourages non-conventional thinking and has inclusion right at its center. This increasingly is how we measure success. Responding to our customers' choices is also leading us on a journey towards building a digitally enabled relationship bank. Just as our customer is using technology to reimagine their lives, we are also reimagining the role that we play in helping them achieve their ambitions. Every day, our clients are increasingly making the choice to interact with us online or on their smartphones. Within our Canadian banking business today, over 82% of our transactions are performed in self-serve channels, including digital and on mobile. The number of mobile banking app users has increased 21% year-over-year. We are responding to this demand by making things convenient for our clients, expanding our product functionality. For example, we know that people on iMessage do not necessarily want to leave their chat to make a quick payment. So now, thanks to RBC, they can just ask Siri to do it for them. Many clients want to connect with a financial advisor in the comfort of their own home. So we have launched MyAdvisor, an online platform where customers can interact with an advisor by video at their convenience. These examples show how we are moving more quickly than ever before. We can shift from the spark of an idea in our researchers' minds right into the hands of our clients, all in a matter of months. More and more, our clients are becoming part of that development process themselves. In Luxembourg and Toronto, our advanced client experience program is growing in success, enabling customers of our investor and treasury services business to co-develop products and give their feedback in real time. While we're increasingly partnering with technology providers, our own R&D is also at the leading edge of the financial services industry. Over the last few years, we've been rapidly growing the number of our global patent filings, and currently, we have close to 100 patents that are either pending or issued. Our scale continues to be a significant advantage. As one of the largest aggregators of data in Canada, we're able to provide greater insight to benefit our partners and clients alike. We've invested a significant amount of time and money to leverage our information properly, transforming data to knowledge and then into value. Thanks to this knowledge, we're establishing ourselves as one of the leading voices on artificial intelligence in Canada. In recent months, have stepped up our investment into this area, including supporting initiatives such as NEXT AI and the Vector Institute. Our clients are already benefiting from our advancements in AI. For example, we're using it to analyze underlying patterns in complex market environments, and we're enhancing client security through biometrics and fraud detection algorithms. These are just some of the areas where we see AI's vast potential, and we'll be building on this potential further at our own research facilities at the University of Toronto and the University of Alberta, which we recently established to push the boundaries of the science around machine learning. Meanwhile, in our second home market, we're extremely pleased with the performance of City National Bank. City National has had a transformative impact on our U.S. business, as well as our wealth management franchise, which is showing incredible momentum with Q1 earnings up 41% from a year ago. The acquisition of City National was a great deal for RBC. We've successfully executed on our integration plan and is a great platform for future growth. We continue to see tremendous organic opportunities as we look to open up in new urban areas and new product lines. In capital markets, our largest business in the U.S., we saw a strong finish to 2016 as our own clients increased their activity in equity and debt issuance. We won a number of significant investment banking mandates on both sides of the border, including Snapchat and Canada Goose. We see opportunities across all of our U.S. businesses in 2017, given expected further U.S. rate hikes and the potential for positive business and regulatory conditions which could further stimulate growth. We also saw strong momentum in the U.K. and Europe, where our capital markets and investor and treasury services businesses saw improved trading flows in Q1. This helped investor and treasury services net income rise by 50% from a year ago due to higher earnings in our funding and liquidity business. Our asset services business also performed well, and we continue to attract new clients on the back of significant investments in customer-facing technology. We're building a long-term client franchise in the U.K. and Europe. Our platform there, targeting institutional and high-net-worth clients, continues to be an important part of our diversified global strategy. On the topic of Brexit, we have contingency plans in place as we await the outcome of negotiations and have well-established offices in Luxembourg, Paris, Dublin, and Frankfurt. But we also see opportunities to help our institutional clients as they look at their own operating models and adapt to the new realities of a post-Brexit Europe. Yet, while some areas of our trading businesses have benefited from increased flows, the geopolitical uncertainty that 2016 brought does remind us of the importance of openness and the strength of diversity and inclusion. We believe passionately that companies, communities, and countries are only successful when they harness the talents of the many, not the few. That innovation only truly thrives in an environment where everyone is fully included. Wherever we operate in the world, this is the RBC way, and it's one of Canada's greatest strengths. It's where Canada has an opportunity to lead globally. As a country with a wealth of natural resources and incredible human resources, we are in a position to set the standard, to show that diversity is an asset, not a liability, that immigration can bring a community together and not divide it, and that we are united in our belief in the benefits of global trade. We need to come together to agree on a strategy for a lower carbon world in the future. This will require building a national consensus on leveraging our natural resources, how to get them to market in a safe and sustainable way, how to use that wealth to invest in the next generation of clean energy. As we think about the future that our young people will inherit, we need to make clear choices today. We need to be bold in our investment in innovation. We need to actively support our entrepreneurs as they look to scale up their businesses, and we must prepare a workforce in transition. This future vision, one in which all our communities prosper, includes having access to a home that's affordable. Yet this has become a distant dream for many Canadians, particularly in Vancouver and Toronto and their surrounding communities. I'm increasingly concerned by the unhealthy combination of factors that have driven the market to the current point of strain. Long time, persistent supply and demand imbalances in the GTA and Vancouver, low interest rates and speculative activity. All of these factors are mixing to push prices up to unsustainable levels, stressing household balance sheets and locking many people out of the housing market. Any single solution is unlikely to be successful on its own. A complex problem like this requires a multifaceted solution which addresses supply constraints and speculative forces, and is mindful of the rate environment, which can be a moderating force. And at a federal level, we welcome the focus on affordable homes and infrastructure as part of the Smart Cities Challenge initiative announced in the budget. And I know the Ontario government is focusing closely on this issue and look forward to hearing their response during the upcoming budget. And the city of Toronto is actively looking at ways to keep housing affordable in the GTA. We would welcome any effort by the three levels of government to coordinate their interventions and to do so reasonably quickly. But longer term, I believe all parties need to come together, governments, developers, realtors, banks, community groups, and others to accelerate our progress in finding policies and sustainable solutions for this issue. While we remain confident in the strength of our mortgage book, we believe that if the issue goes unchecked, it could drag on consumer spending, locking up too much capital unproductively, and potentially becoming an inhibitor to Canada's future economic growth. Ladies and gentlemen, we've heard it said that the world needs more Canada, so Canada can't stand still. As a business, we've made our choices with purpose, and we've been meaningful in our diversified strategy in Canada, in the U.S., and globally. This diversification has benefited our clients, our colleagues, and our communities alike. Our consistent returns to shareholders, our success over the last year, over the last 148 years, has been the result of this clear strategy and an ability to adapt. Our purpose guides us on this journey, and our purpose leads us to invest in the future and consistently reimagine our role as a trusted advisor to our clients, helping our communities prosper. Last week, we showed that purpose with the announcement of our new youth strategy, RBC Future Launch. This is our largest ever commitment to help prepare young people for the future of work. We're putting all of RBC behind this effort, our resources, capabilities, and our people, and have pledged CAD 500 million over 10 years to make real, tangible progress. We'll help remove barriers and provide access for young people to learn skills, experience jobs, share knowledge, and build resilience for the future of work. In particular, as part of our youth strategy, we want to share our expertise around co-ops and internships. I believe passionately that work placements are a huge social leveler and improve the value of education. We're working closely with others across our industry and in other sectors to achieve that goal that every single Canadian undergrad student should be exposed to some form of meaningful experiential learning before graduating. I look forward to talking about this more in the coming weeks. Our youth strategy and our Make 150 Count initiative are a clear demonstration of how we're putting the power of RBC behind investing in our country's future. As it celebrates its 150 birthday and contemplates its position in the world, Canada is at an inflection point. We need to use our investments in innovation to harness our resources. We need to ensure that we have a sustainable housing market. Critically, we need to solve how we can best prepare for a workforce in transition. This really is an exciting time in our history, and RBC is proud to be in a leadership role at this watershed moment. With your continued support, RBC will be there to help shape that future. This is our moment, collectively and with purpose, to stand tall. Thank you. [Foreign language] And now I'll hand the meeting back to Audrey Feeney. Thank you, Dave, for that excellent and informative presentation. At this time, I would like to introduce Bill McFarland, Rahoul Chowdry, and Alaina Tennison, the representatives of PricewaterhouseCoopers LLP, our auditor for the 2016 fiscal year. Copies of the auditor's report and the financial statements have been mailed to shareholders and are also available at the information desk. Shareholders will now have an opportunity to ask questions on the financial statements. If your question relates to a matter other than the financial statements, please wait until the time provided for shareholder questions following the formal legal business of the meeting. If you have a question on the financial statements, please proceed to the nearest microphone. I am seeing no questions at the moment on the financial statements. We will proceed with the business of the meeting. You have received the notice of meeting and proxy circular, which specify that the matters to be considered at this meeting. I will now ask Karen to review the voting procedures. Karen. Good morning. Today, we will be voting by ballot, except as otherwise advised by the Chair. Shareholders who have not voted by proxy and proxy holders who are present receive ballots at the registration desk. Please print your name clearly and sign each ballot. Votes will be counted by the scrutineers. Preliminary results will be announced later this morning, and final results will be posted on our website. Only registered shareholders or their proxy holders are entitled to propose or second motions. A simple majority is required to approve matters voted on at this meeting. Thank you, Karen. To facilitate proceedings, we have asked a select group of RBC employees who are shareholders or proxy holders to move and second motions. I will call on them at the appropriate time. The first item of business is the election of directors. Biographies of each of the nominees begin on page 9 of the circular. Your board places strong emphasis upon selection of director candidates, assessing the board's existing strengths against the evolving needs of RBC. An important element of this is ensuring that a diversity of viewpoints, backgrounds, and experience are present at the board. The number of directors to be elected has been fixed by the board at 13, and the nominees standing for re-election, one of them is for the first time. Andrew Chisholm was Senior Strategy Officer at Goldman Sachs in New York and subsequently served as Advisory Director of the firm until his retirement last year. During his 30-year career, he served in a variety of progressively senior leadership roles, including as Head of Global Financial Institutions Group in both London and New York, where he focused on strategic advisory, mergers and acquisitions, risk and capital management, and principal investing advisory for financial institutions globally. We welcome the extensive expertise that Andrew brings to RBC, and we are very pleased to welcome him to the board. I will now ask Karen to read the names of those proposed for election as directors, and I would ask each of them to stand and remain standing as the names are called. Madam Chair, the following individuals are proposed for election as directors: Andrew Chisholm, Jacynthe Côté, Toos Daruvala, David Denison, Richard George, Alice Laberge, Michael H. McCain, Dave McKay, Heather Munroe-Blum, Thomas A. Renyi, Bridget A. van Kralingen, Thierry Vandal, and Kathleen Taylor. Thank you, Karen. I will now ask Stephanie Hein to nominate the directors. Stephanie Hein. I have worked for RBC for seven years and am currently the Senior Director in Group Risk Management, supporting Canadian banking. I am pleased to nominate each of the persons named by the secretary to be elected as a director of the bank to hold office until the close of the next annual meeting of common shareholders, or until their successors are elected or appointed. Thank you. Are there any questions or comments on the nominations? I declare that the nominations are closed, and we will now proceed with the vote. On ballot A, please mark your vote on the election of directors. The next item on the agenda is the appointment of the auditor. I will now ask Richa Hingorani and Mark Beckles to make a motion for the appointment of the auditor. Madam Chair, my name is Richa Hingorani. I have worked with RBC for 9 years and am currently Senior Director of Digital Strategy in Personal and Commercial Banking. I move that PricewaterhouseCoopers be appointed auditor of the bank until the close of the next annual meeting of common shareholders. Madam Chair, my name is Mark Beckles. I have worked with RBC for 6 years, and I am currently head, RBC Insurance Advice Centre. I second the motion. Thank you, Richa and Mark. The motion has been moved and seconded. Is there any discussion? We will now proceed with the vote. On ballot A, please mark your vote on the appointment of the auditor. The next item of business on the agenda is the shareholder advisory vote on our approach to executive compensation. The text of this advisory resolution is set out on page 3 of the circular. We hope you have had a chance to review our compensation discussion and analysis in this year's circular, which explains in detail how our compensation programs are designed to pay for performance and are aligned with effective risk management practices and the long-term interests of our shareholders. We take a progressive approach to continuously improving our compensation programs, integrating best practices, and responding to input from shareholders and our independent compensation advisor. In considering our approach to compensation in the future, the board will take into account the results of today's vote, together with other feedback received from shareholders. I'll now ask Petra Haneberry and Robert Dippolito to make a motion to approve this resolution. Madam Chair, my name is Petra Haneberry, and I have worked with RBC for 21 years and am currently Senior Director, Automotive Finance Products in Strategy and Corporate Development. I move, on an advisory basis and not to diminish the role and responsibilities of the board of directors, that the shareholders accept the approach to executive compensation disclosed in the management proxy circular delivered in advance of the annual meeting of common shareholders. Madam Chair, my name is Robert Dippolito. I have worked with RBC for over six years, and I am currently Director of Client Relationship Management Solutions in Wealth Management Technology. I second the motion. Thank you, Petra and Robert. The motion has been moved and seconded. Is there any discussion? I'm hearing. Could I have a light? I think I'm at microphone seven. Is that correct? Please proceed. My name's William Davis. Since Royal Bank frequently meets in Toronto, you've heard from me on executive compensation frequently, at least as far back as the Occupy movement, which long before the students from Emory were thinking about these things. Even back in the Occupy movement, there was a strong feeling that executive compensation was widening the gap between the 1% and the 99%. The shareholders with good memories will recall that I filed a shareholder proposal with two other co-filers a few years ago, recommending that banks consider including in their calculations of executive compensation some vertical metrics. The banks agreed to do this, so we withdrew the shareholder proposal. The point of the request was to address the fact that the prevailing practice of basing senior compensation on comparisons with those other 1% elite who hold similar positions in other financial institutions was not only perpetuating this troubling gap between the 1% and the ordinary employees, the customers, and the shareholders, but that it was clearly widening a gap since horizontal benchmarking became the norm. The bank has, in fact, introduced a vertical metric in the proxy circular. It's found on page 54. It reads, "The pay ratio comparison of the CEO's direct compensation be considered relative to the median direct compensation of all employees and to changes in this comparison over time." I think of this as good news. I'm a happy shareholder hearing it, and I'd like to think it's the beginning of a process. Why is it important? Our prime minister, celebrating the Canada-European free trade deal, sounded a stern warning. "Most people," he said, "do not see the benefits of trade and commerce flowing to them." He urged European leaders to share the benefits more equitably. Pundits are attributing the election of Donald Trump partly to the alienation felt by many from whom the benefits being enjoyed were not flowing but were going to a small elite. I suggest that executive compensation of the scale that it's at, going to the same 1% while the majority are on the outside looking in, is a factor in the dilemma we're facing. We call this a say on pay vote. In the circle in which I move, and if you asked even the people in the room, but certainly the people on the street, they would simply say that the pay is way too high. But we ask the shareholders, and we give them a rather convincing explanation, and they normally vote that the pay is okay. The explanation makes it seem reasonable, but it's because we don't compare the executive compensation with any other compensation. We just compare it with the horizontal benchmark of similar people in similar positions. We never ask the question of why is the level of the CEO at least 150 times that of an ordinary employee when it used to be 25 times or 50 times. I want to applaud this new metric in the board's work, but I do fear that the old assumptions that we have to overpay senior people with our shareholders' money, or they won't produce, or they'll be lured away to a different culture for an extra half million dollars. These assumptions seem to be operative. The fundamental thrust of our compensation model seems to be, to be the best, we must pay the most. I got thinking about an old radio program that the students and many of the younger people here never heard. It was called "The Prairie Home Companion." The whimsical Garrison Keillor used to tell little stories about Lake Wobegon, and he always used to say, "Lake Wobegon, where every resident is above average." I think horizontal benchmarking is suffering from the Lake Wobegon syndrome. I've sort of lost my place here. I enjoyed the little analogy so much. Really, once your own compensation reaches a point where you assured your future and that of your family for generations, what does another billion or 2 really matter? We're sometimes told that employees seldom leave a firm for money if they have job satisfaction and a rewarding work environment. Should senior people really need that kind of huge bump up in salary to motivate them? I note that the metric is to be looked at, this metric, comparison with median salaries, is to be looked at as it changes over time. I suggest that to do this moral issue justice, the time really needs to go back to the beginning of the discussion, at least back to the time of the Occupy movement. All the analysis in the compensation report with their noble goals fail to account for the quantum of pay. The only way to address the quantum is to do the comparison to median employees or other vertical metrics over a decent period of time. I'd like to ask the compensation committee, whether it's Ms. Labarge or yourself, when you say changes in comparison over time, what does this signify? When did the time start? Thank you, Mr. Davis. You've given us a good rendition again of your views on this. Very important and pleased to have you back again this year. In terms of your specific question relative to vertical benchmarking, as we disclose in the proxy, the board, and through the compensation committee's work and otherwise, does look at this as one of the factors. As we also explain, there are many factors that go into the board's deliberation on the compensation of our CEO and senior executives. As you all know, this is one of the board's most important jobs on behalf of you, our shareholders, and one that the Human Resources Committee, under the leadership of its able chair, takes on very seriously. As you've read, we have compensation principles in place to ensure RBC remains competitive. You heard Dave talk passionately about the importance of talent, and so paying competitively and appropriately for senior executive compensation is something we look at as well. In addition, I mentioned that we spend quite a bit of time on risk adjustment of that compensation to make sure that we're not only paying for performance, but that performance is sustainable and aligned with our risk appetite. In terms of your very specific question, we go back a number of years to look at the trend on this against a form of median. As you're all well aware from your experience with Royal Bank, this is a large, complex business. Actually, a multi-industry business with large capital markets, insurance, traditional banking, wealth management, and investor and treasury services. The notion that there's one benchmark is something that's difficult to apply. And in addition, is not in your board's view and in the view of the Human Resources Committee, the dispositive factor. It's one thing for us to look at as we ensure that we are paying executives in a manner that we believe is in the best interest of RBC and its stakeholders, and most importantly, of course, its shareholders. Thank you again, Mr. Davis, for being with us today and your comments on this important matter. I have another shareholder proxy holder at microphone number nine. Please proceed. Thank you. I'm Willy Gagnon, and I represent the MÉDAC, the Mouvement d'éducation et de défense des actionnaires, and we usually meet every year. And we usually speak on compensation each year when the advisory vote is taken. MÉDAC is 20 years old, and I'd like to remind everyone that it was following MÉDAC proposal that the advisory vote on compensation was adopted in 2009. We are extremely in agreement with Mr. Davis. We totally agree with what he said, and we even intended to say such things ourselves. So I will spare you everything that he just said. I'm not going to repeat myself. I'd just like to add that in the Meridian report, which was made by NEI, they not only talked about equity ratios, but they also said that publicly traded companies, the compensation has gone up by 140%, whereas the Standard and Poor's Index has gone up 42%. The seven largest banks in Canada paid CAD 216,314,972 in compensation to their senior management. Almost CAD 70 million to those who received most. These are huge amounts of money. In terms of the compensation ratio, you were mentioning the fact that you use this in page 54 of this circular. Of course, in French, it takes more words to say this in French, so it's on page 62. And we think it's unfortunate that you don't publish the ratio that you calculate. We went to the Canadian Bankers Association in order to find a way to calculate this ratio. As you know that in the Dodd-Frank reforms in the States, this is an issue. What should the ratio be based on? The average salary of employees or the median salary of employees? Or the average or median salary in Canada, as Scotiabank does? What we would like is that this ratio be published. You have it. It wouldn't cost a cent to publish it in the circular, and we hope that all banks do so. When the advisory vote was adopted, a number of companies started to do this too. We look to you for leadership in this area. We calculated a ratio, and you're not the worst amongst all the banks. The Laurentian Bank is at 34. Scotiabank is at 135. You're at 76. You're right in the middle of the pack. Since the beginning of MÉDAC, we have felt that a 20 to 30 times ratio would be best. You have gone down, and we hope that this trend will continue. In Israel last year, the state adopted a law limiting the salary of the highest executive in a bank to CAD 900,000, and nobody resigned. Do we have to wait for the state to intervene? They also imposed a ratio, 35 times the salary of the person who has the lowest salary, not the average salary, but the lowest salary. Once again, no bank president resigned. The bank's compensation policy does not meet the levels of equity that we've been asking for. We're asking all shareholders to reject this policy based on what we just said. Thank you very much, Madame. Thank you, Monsieur Gagnon, for being with us again here this year for your additional comments and advice. Very much appreciated. Next microphone is microphone number 8. My screen is prompting me. We're back on script. I see no further comments on the advisory vote, so we'll now proceed with the vote. On ballot A, please mark your vote on our approach to executive compensation. At this point, I'm going to ask the scrutineers to collect ballot A. If you have a ballot to be collected, please raise it so that the scrutineers can see where we need to collect from. Thank you. Any more ballots? I see one right in the center here. Just finishing up over in the side aisle here. All right. I think we've done it. The voting is now closed for the election of directors, the appointment of the auditor, and the advisory resolution on our approach to executive compensation. We'll now move on to the shareholder proposals. Shareholders have had an opportunity to read these proposals and the board's responses, which are set out in the circular starting on page 89. Before the shareholder proposals are introduced, I'd like to comment on proposal 2 regarding disclosure of lobbying activities and proposal 5, which relates to proxy access. We understand the importance of these two issues to our shareholders. Since the lobbying proposal was submitted, we've enhanced our disclosure in this area, and progress is continuing. With respect to proxy access, your board announced on March 22nd our commitment to continuing discussions begun some time ago with shareholders and governance advocates, including the Canadian Coalition for Good Governance, to consider development of an enhanced proxy access regime that is consistent with the bank's regulatory and legislative framework here in Canada. To turn to the proposals in their order. The first proposal was submitted by Mouvement d’éducation et de défense des actionnaires or MÉDAC, which is represented here today again by Monsieur Gagnon. For the information of shareholders, also included in the circular is another proposal that MÉDAC submitted but withdrew following discussions with RBC. Monsieur Gagnon, I would ask that you take not more than five minutes to speak to the merits of your proposal, and we will then open the floor for discussion. Shareholders may wish to vote on the proposal by marking ballot B as it is being presented. Monsieur Gagnon, please proceed. I am still Willie Gagnon, and I am still speaking on behalf of the MÉDAC, and I will certainly not take more than 5 minutes, I guarantee. Our proposals deal with similar issues. One was specific to the Panama Papers case of last year, and after discussing with the bank, we agreed to withdraw the motion given the exceptional measures that you took in order to settle this issue, or at least to find out what was going on. I am going to read you the proposal. It is called Panama Papers. It is moved that the board of directors reveal the measures that the bank took to be an exemplary corporate citizen. This was presented to the assembly, and I am sure what you said here is your answer, and we are very satisfied with this. Now, for proposal number one, withdrawal from tax havens. It is proposed that the board of directors adopt a policy of withdrawal from the tax havens or low-rate jurisdictions, and we give the definition of the Financial Secrecy Index and the Tax Justice Network. The idea is to ensure that what is currently legal, what you have the right to do, but which is not a moral position, what is happening in these tax havens, the idea is to end this. We are quite aware of the fact that you are acting legally. What we are asking of you is to act as morally as possible. Our objective in the final analysis is to make these things immoral and illegal. We know that that is not what is happening here. We agreed with the bank that in as much as possible, you would support our efforts to make these things immoral and illegal when we go before the government to do so. We certainly hope that these are not vain promises, and we certainly hope to be able to work with you on this issue. In particular, when we go to the Canadian Bankers Association to ask them to change the rules. Please help us. We are going to be working on this over the upcoming years, and of course, we ask all the shareholders to support our proposal to withdraw from tax havens. Thank you, Madam Chair. Thank you, Ms. Gagnon, for your able presentation of your proposals. Thank you very much. Is there any further discussion on this proposal? Seeing none, I will ask that you on ballot B, mark your vote for proposal number one. The second proposal was submitted by SumOfUs, which is represented here today by Lisa Lindsley. Ms. Lindsley, please limit your remarks on the proposal to 5 minutes, and we will then invite comments from others. Welcome. Thank you. Fellow shareowners and members of the board, I'm Lisa Lindsley, and I represent sumofus.org and over 1.5 million Canadian members of SumOfUs, most of whom are indirect shareholders or direct shareholders in RBC. Our proposal asks RBC to provide a report on its spending at the local, provincial, and national levels to influence public policy, including indirect funding of lobbying through trade associations and funding of indirect grassroots lobbying campaigns, as well as the policies and procedures governing lobbying and the board oversight for these payments. This proposal makes strong business sense because without a clear system of disclosure, corporate assets can be used to promote public policy objectives and regulations that pose risks to RBC and its shareowners. As we saw in the 2008 financial crisis, easing banking regulations can lead to short-term profits for banking executives and disastrous losses for shareholders and the public. A key part of an investor's job and a banker's job is to know and understand risk. RBC has funded the Fraser Institute, a right-wing think tank that is linked to the Koch brothers and has been exposed as part of the network of climate change denial funded by Exxon. The Fraser Institute has also advocated positions which are antithetical to retirement security, something which could hurt RBC's brand with retail clients. Greater disclosure would allow RBC shareholders to adequately assess shareholder risk. The leading proxy advisory firm in Institutional Shareholder Services has recommended that shareholders vote in favor of this proposal. According to ISS, quote, "While lobbying is widely acknowledged to be an important strategy in fulfilling organizational objectives, it also carries risk. Poorly thought-out efforts can heighten reputational risk, such as corruption or other scandals. Companies using agents, advisors, consultant lobbyists, or other third parties to act on their behalf add potential for wrongdoing. This risk, if materialized, can cause substantial long-term damage to the value of the companies involved. Investor confidence would be enhanced if they know that the companies they invest in have properly recognized this risk and have in place the relevant policies and procedures and that the board has proper oversight mechanisms in place to counter the inherent risk in lobbying activities. While some have insisted that lobbying expenditure disclosure does not lend much assistance to the full understanding of the relationship between a lobbying effort and long-term corporate objectives, the magnitude of expense, as some have also argued, indicates the intensity of the lobbying effort." Close quote. ISS also notes that Canada's lobbying authority does not require disclosure of lobbying expenditures. Publicly available data does not provide a complete picture of RBC's lobbying expenditures. RBC's board and its shareowners need complete disclosure to be able to evaluate the use of corporate assets for lobbying and to assess any risks the spending can pose. There's a saying that what gets measured gets managed. Knowing RBC's lobbying spending will be disclosed will ensure our board and management are both overseeing our companies of lobbying to make sure it is done in the best interest of shareholders. We appreciate the dialogue we had with RBC's Karen McCarthy and her team. We are heartened to see that RBC has enhanced disclosure, in part in response to this proposal, by naming organizations and trade associations to which RBC pays membership fees of over CAD 50,000. However, our proposal asks for disclosure of all payments for lobbying, including all payments to trade associations, lobbying at the provincial level, and in all jurisdictions outside Canada. One of the currencies that banks deal in is trust. Trust is pivotal for banks because people are literally investing their life's work, their family's legacy, their children's future, or saving to make their dreams come true. RBC has been mired in a number of recent scandals recently, including funding of the controversial Dakota Access Pipeline, allegations of using high-pressure sales tactics to dupe clients in branches and call centers, and selling products and services that aren't necessarily in the best interest of customers. The improved transparency of our resolution doesn't address these specific behaviors, but it does send a message to customers and shareholders that RBC is a brand endeavoring to rebuild trust. It sends a message that RBC is committed to transparency. We urge shareholders to vote for this proposal. Thank you. Thank you, Ms. Lindsley, not only for making that proposal but for being with us today to present it to the shareholders. Is there any further discussion on this proposal? Seeing none, on ballot B, please mark your vote on Oh, excuse me. Microphone number nine. Madame la Présidente. Madame Chair, I would just like to say that we, MÉDAC, the Mouvement d’éducation et de défense des actionnaires, supports this proposal. On ballot B, please mark your vote on proposal number 2. I'm now going to ask the scrutineers to collect ballot B. Are there any further ballots? Terrific. The remaining 5 proposals were submitted by Lowell Weir, who is not able to be with us today and has asked that we put his proposals before the meeting. These proposals are listed on ballot C and are set out in the circular together with management's responses. Is there any discussion on these proposals? On ballot C, please mark your vote on proposals 3 through 7. When you're ready, the scrutineers will be by to pick up those ballots. All right, any other ballots? Oh, sorry, here's a couple more. I think we've got them all. Voting on all matters is now closed. In celebration of Canada's 150th anniversary, we're excited to share the following video. It showcases how RBC is inspiring thousands of young Canadians to Make 150 Count and demonstrates that when RBC invests in youths, great things happen. Following the video, Dave McKay will lead the next part of the meeting when shareholders and proxy holders will have an opportunity to ask additional questions. Questions should be of interest to all shareholders and not of a personal nature. We look forward to hearing from you. I decided to give my money to Choices Youth Shelter, which is a shelter in Orangeville that offers homeless youth of 16 to 24 a place to stay. I went to all the grocery stores in Orangeville and asked them, "Will you price-match my CAD 150, or can you donate to help out this great cause?" We were able to get CAD 480 worth of gift cards for Choices' healthy food initiative. We made 150 count within our community of Orangeville. With my 150, I'm holding a networking event for young Canadians who are looking to start their careers. Prior to having mentors in my life, I had to try and figure things out myself. The job market is highly competitive. Now that I'm in a position where people are actually asking for advice, I know that I can provide that, and I know that it's going to make a big impact. With help from St. John Ambulance, I used my 150 to pay for a standard first aid course for St. Marys business owners and employees from our downtown core. Being trained in first aid can mean the difference between life and death. By teaching life-saving skills to even a small portion of St. Marys, we enable ourselves to help each other and strengthen as a community. Thank you to RBC and St. John Ambulance for providing downtown employees with standard first aid and St. Marys with life-saving skills. My name is Anthony Shirley, and I'm proud to be playing for Team Canada. With my 150, I want to bring a little joy to kids living with disabilities. Is everyone going to be painting it red? Yeah. Seeing how strong they are is very inspiring for me. I just want to be able to give something to their face. Go Canada! My name is Harleen Atwal, and I go to the University of Victoria. I was given CAD 150 by RBC to make a difference in my community. I decided to buy flowers from my local grocer and bring them to campus and give them out to people with little notes attached because sometimes midterms are rough. A small action like holding a door open for somebody or paying for their bus ticket, it may not seem like a lot to us, but it could be a lot to another person. So many reasons to be proud of our youth in this country. At this point in the meeting, our shareholders will have the opportunity to ask questions or make comments. If you have a question, please proceed to the nearest microphone. Please give your name and tell us whether you are a shareholder or a proxy holder. If your question relates to a personal matter, please speak with the RBC employees at our information desk in the lobby. I will now open the floor for questions or comments. I see microphone 4, and we'll work our way across. Yeah. Yes. My name is Paul Gurnon from Burlington, Mr. McKay. I want to talk now about the real meaning of risk in the mortgage book. According to a magazine I read, Royal Bank has 48% of assets in mortgages. Laurentian Bank has 52%, and CIBC has 60% in mortgages. Another article in the paper, this is the sharpest real estate upturn since 1989 in Toronto, and I remember that 1990 and 1991 followed 1989, if you can remember. The interest rates went straight up, and Royal Trust would have gone broke if it wasn't taken over by Royal Bank because they had 60% of their assets in mortgages in Royal Trust. So, what happens if inflation is coming and rates are going up sharply? I don't want to make people too uncomfortable, but with your 2.5% mortgage, the long-term average mortgage rate in Canada is about 5%. What if we gallop to the average? Now, yes, I understand there are insured mortgages and uninsured, and I think it's time for the stock brokerage bank analysts to take a serious look at all banks in terms of the mortgage book and how much real risk there is there going forward. Can you comment on my comments? Absolutely. It's something as a management team and as a board that we spend a significant amount of time on. It is the largest asset class in our balance sheet, as you referenced, and over 40% of those mortgages on our balance sheet are insured by either the CMHC or another guaranteed party. So I think that is a big risk. I'm going to ask Mark Hughes, our Group Chief Risk Officer, who spends a lot of time on this with myself also and with the management team. But certainly as the process that we go through to stress test those events, to look at potential corrections in the economy, corrections in housing prices by market and across our country, gives us comfort that we can withstand all the scenarios that you can envision as far as the risk goes and corrections in our economy. I think stress testing overall, carefully watching or how we adjudicate mortgages. To the point you said that we are in a cycle of historically low rates. We do not adjudicate the ability for a customer to pay at that current rate, and that's a B-20 legislation that changed, but we were largely doing that even before B-20. Can we adjudicate it at a higher rate? I believe the five-year rate, and Mark can clarify that. So we are very prudent when we look at a customer's capacity to pay. We don't use the low current rates. But we build in a buffer for future rate increases. Mark, do you want to make some more specific comments maybe about how we stress test and how you get comfortable with the risk in our largest asset class? Thank you, Dave. Thank you for the question. Certainly with the size of the mortgage book on RBC, as Dave says, we do spend a lot of time considering it with respect to the acceleration of house prices in Toronto and Vancouver in particular. We are spending even more time considering it. There is a number of ways that we do that. We look at, as Dave referenced, when we are originating a new mortgage for a customer, what is their ability to pay? One of course, the biggest issues with that ability is if interest rates do go up. Dave referenced the qualifying rate that we actually use, which is higher than the rate that the customer will actually pay, but it is essentially a stress-testing capability for us to understand that if something increases, if interest rates increase, can the customer still meet their mortgage requirements? Once the mortgages are on our books, we continually stress test for the portfolio. That includes higher interest rates, that includes unemployment rates, which would also be another significant factor if that occurred. In both cases, we feel very comfortable that our portfolio can withstand those elements of stress test. I think the other aspect that is quite important to understand is that Canadians are generally very conservative in how they manage their portfolio. They amortize their loan over the time that they are with us. On our portfolio today, our current portfolio, the value of the mortgage to our loan book is around 54%. Even with a price drop challenge, our customers can withstand that because of the way they have paid down their equity through amortization. We feel the combination of amortization, stress testing, and the quality of our portfolio today makes us very comfortable with the situation, but it is still certainly something that we have to continually manage and monitor. Okay. You did say that almost 60% of your mortgages are uninsured. Is that correct? That's correct. Okay. Some of these advertisements that you hear on the radio really lift your eyebrows. I have a friend of mine who is a self-employed mortgage broker, and he second and third mortgages, his rates start at 7 and go up to 15. We don't do those. Now, in a real estate shakeout, these kinds of people are going to be in trouble. I don't think it's up to me to comment on how some of those individual institutions operate. I would note from an RBC perspective, we do not have any second or third or fourth mortgages on our portfolio. Mark, we don't originate from the broker community. We originate through our own employees. Correct. Which we believe is a higher quality channel. Okay. I want to say happy mortgage future to you and to the whole investment industry. Thank you. That's a new day, a new celebratory day, I guess. We'll go to microphone nine next. Madam Chair, I know I'm speaking to the President of the company. I'm Willy Gagnon from the MÉDAC. On March 10 last, "Go Public," a CBC program, did a very disturbing report on the pressure that TD Bank is putting on its employees. On March 15, five days later, CBC, by that time, had received over 1,000 calls from employees in all Canada's major banks. I'd like to read an excerpt from this report, which refers to the Royal Bank. Please excuse my accent in the language of Shakespeare. An RBC teller from Thunder Bay, Ontario said even when customers don't need or want anything, quote, "We need to upgrade their Visa card, increase their Visa limits, or get them open up a credit line. It's not what's important to our client anymore," she said. "The bank wants more and more money, and it's leading everyone into debt." An RBC certified financial planner in Guelph, Ontario said she's been threatened with pay cuts and losing her job if she doesn't upsell enough customers. Quote, "Managers belittle you," she said. "We get weekly emails that highlight in red the people who are not hitting those sales targets. It's bullying." End of quote. Employees at several RBC branches in Calgary said there are whiteboards posted in the staff room that lists which financial advisors are meeting their sales targets and which advisors are coming up short. Have you seen this program? Did you read these texts? If so, what have you done? You must understand that this kind of news sullies the reputation not only of the Royal Bank, but of all banks in Canada. In today's world, where people are going out to demonstrate against high salaries, this is a very odd thing. Thank you for your question, Mr. Gagnon. As I said in my speech, I addressed it directly, but I'll address it again. The trust and loyalty of our clients we put at the core of our organization, the core of our purpose, the core of our culture. We take that very seriously. We've been in business for 148 years because we put our customers at the core of what we do. By doing that, what does that mean? That means that we listen to them. We take time to understand them. We discover what their needs are, and we respond accordingly. To your question, how do we, as an organization, make sure that we do that as consistently and as constantly as possible across the organization? First and foremost, we survey our customers constantly, daily, about their experiences with our organization. We achieve the top rating in customer satisfaction in this country among the big five banks. We constantly listen to external surveys, internal surveys, and we monitor against that. We listen to our employees. We survey them informally, but we survey them formally every year, and they write in their comments, and we listen to that feedback. We have the most employee engagements as the highest ever in our firm. We listen to that, and we take that feedback, and we do make changes. We do change our practices across the organization based on feedback from our clients. Some of our best product ideas have come from those employee surveys where they say, "If I could only offer this to my client, I think they would be much better off." So we listen to clients, and we listen to our employees, and our numbers prove that. The statistic I gave you in my speech is another really important mark. Of the 2.4 million products we opened in the last year, less than one-tenth of 1% of clients had a complaint about how that process went. Less than one-tenth of 1%. 99.9% plus. That's outstanding. That's our culture. That's our proof point that we are listening to clients and we're doing the right thing. We do not accept the characterizations of one media outlet of RBC. As I said, I've worked here for 30 years. I do not recognize RBC in that culture. Employees do not recognize RBC in that culture. We monitor for that, and we're very proud of our client satisfaction numbers and our employee engagement, and we work very hard at it as an institution, and that's why we're successful. Thank you for your question. I hope you are comforted by the fact that we take this very seriously. Merci. Microphone 4, I think is next. Am I missing someone? Good morning. 4, then I will go to 3. Good morning. Yes. I'm a shareholder and a customer. My question or just comment is in the same line, but it's mainly a compliment. One for the performance, and I know the balancing. I feel a little bit conflicted as both a shareholder and a customer. On the one hand, we cheer when revenues go up and get more and cut costs. Yet, on the other hand, as a customer, don't charge me more, and let me keep the great staff that you have in your offices. I know for my own family, it's decades, if not sort of generational, the relationship with the trust in a financial institution. A lot of it's the people that are there. It is. It is not the high sales pressure tactics. It is really the low pressure that I am sort of thinking about, because they are the cement in the relationship. The people that have the strange notion that, as a customer, you come first, and it is not necessarily quotas. It is a concern about protecting them and that relationship. Just wanted to comment on how terrific they are, and we hope that as they get evaluated, that there is not a penalty on that side, because we would like to maintain that. Thank you very much. Thank you. I really appreciate your comment because we are a world in transition, and I hope you noticed in my comments in my speech that we do not pretend that we are a technology company. We are a relationship bank, and we are trying to build a digitally enabled relationship bank. That is a very important choice of words because that puts the employee at the center of our relationship with our customers and developing that employee and making sure that we have broadly, from myself on down, as you see, my customer metrics in the proxy start at the top of the organization and flow down. The customer satisfaction is embedded in everyone's job and making sure that we do the right thing for the long term. Again, when we look at our mission to be one of the most trusted banks and highest performing banks in the world, and we put enormous emphasis on how we do business. How we achieve our results are just or more important than the actual results themselves. We hold ourselves to that standard. When we have the odd employee who does not live up to our code of conduct or to our purpose, to our values, we act accordingly. I give you that pledge. Thank you. Microphone 3. My name is Ross Durant. I have been a customer of the Royal Bank of Canada since 7 years of age. Thank you. I remember when I first went to the bank, and the teller, I couldn't reach the top of the cage, would come out. Showed me how to roll coins for my paper route and make my deposit, and if I did it correctly, I got a candy. I'm now in my mid-80s, and I still go to my branch occasionally for education on how to use my cell phone to do my banking. I want to say, in all these years, I have never had pressure from the Royal Bank to buy something or do something that I did not want. On the other hand, I have had great help and assistance over all these years in developing my businesses and getting help when I needed it. I wish to thank the Royal Bank for all these happy years. Thank you so much for those comments. I, too, started as a paper boy. Montreal Gazette, 6:00 in the morning, every morning, 50 paper route in the suburbs of Montreal. It builds character, particularly in the winter. I remember those days. My father took me to the Royal Bank to open an account to deposit my money. So we have very similar backgrounds, and it certainly did build character over time. Do I see any more questions? 12. 12? Okay. Yeah, sorry, right in the corner. Yeah, 12. My name is Wilfred Pierre. I am a shareholder and a pensioner. I am also the first Aboriginal person hired by the bank in South America. My question pertains to pensions. What I have discovered is that once you retire and your pension is calculated, that pension remains static, whether you live one year or 50 years. I would like the board to take into consideration the fact that pensioners are not only valuable members of the Royal Bank family. We have served, we encourage our families and all our acquaintances to do business with the bank, but we also have to cope with the stresses of the high cost of living. I think it is high time that the bank gives serious consideration to reviewing the pension paid to pensioners and to do something positive about it. It is very expensive to live, and I think the bank is in a position that they can do something about that. I leave that up to the board to work something out. If I am alive next year, I will come back and try to find out whether my question was addressed. Thank you very much. I do look forward to seeing you back here next year. I would like to acknowledge the very special role our pensioners do play in our company. They are incredible ambassadors in the country at large and just beyond Canada as they decide to retire in different markets. So I know that you are very, very special, important ambassadors. We do do an annual review of our pensions, and we would expect to do that again this year. We look at a number of variables, the inflationary environment, the interest rate environment, and we make that determination annually. So we will go through that process again this year and in years to come and make the best decision for all parties concerned. So I really thank you for your question. Do I have microphone 10? Then we will go to 12. Ten next. Hi, I have two questions. The first one is procedural. Will the preliminary results be announced of the votes here today? They will be announced after my session here, yes. Okay, great. Thank you. My second question relates to the financing by RBC of extractive projects that violate the rights of indigenous peoples, and do not acquire the free prior and informed consent of those peoples in advance. The Dakota Access Pipeline is one such project, and hundreds of thousands of people have signed petitions and have withdrawn their money from various banks. We know that at least 5,000 of these people are RBC customers, and RBC has funded this project. I'd like to know what the bank is doing about that, and is the bank withdrawing from the project? First, I'd like to say your assertion that we funded the Dakota Pipeline project is incorrect. I am aware that we appeared on certain websites indicating that we had participated in that syndication, but we are not part of the syndicate that funded Dakota Pipelines, period. I don't know where you got that information. We've been battling certain websites that have listed our name on there as a participant of Dakota Pipelines, but we are not, and that's factually incorrect. I just want to make that very clear. Just to clarify, I think it's because you funded the companies that are the partners in the pipeline. The broader enterprises. Correct Not that specific pipeline deal. As we consider, and maybe I will ask Doug to make a question or Mark, as we consider various projects, we look at all the appropriate environmental, regulatory, political approvals. As we look at how the Canadian government has handled that consultation process, it gives us comfort. As I said in my speech, we do fundamentally believe that we have to play an active role in moving to a lower carbon footprint in the future. We accept that fact. We believe the choice between moving too quickly or moving in a false way, making false choices, we cannot convert our global economy overnight to a lower carbon, zero carbon. It is just, as you can imagine, impossible to convert. How we do that is absolutely critical. We have to lever our resources that will enable us through tax dollars and royalty and profits to reinvest in clean technology, to invest appropriately in the safe transportation and environment-friendliest transportation of those products to market. We fundamentally believe we have to get to a lower carbon world, and we believe that. It is the journey that we choose to take that is really important and how we do that in a well-thought out, smart way is what we are advocating for. We have the same fundamental goal. We just have a different belief in how to get there. What about funding companies that trample on the rights of First Nations and other indigenous peoples? We fundamentally believe that the right consultation process has to happen. We rely on all levels of government, from federal to provincial, to have those consultations, and we will look at the ultimate decision by our federal and provincial governments as what they feel is best for their populace. Okay. I would just lay out that the Equator Principles and other human rights policies may go beyond what national government laws require, and I would urge the bank to hold to a higher standard. I thank you for your input. Thank you. Microphone 12. No under. I'm a shareholder, and I guess I'm getting a little bit sick and tired of seeing people from Central Ontario, and Toronto especially, always attacking anybody else that's trying to make a living, whether you're out in Alberta or anywhere else. You seem to live in a vacuum there. They're always asking the federal government for more money. They don't give a damn about First Nations or the original people here. If you don't believe me, just go look at places like Clayoquot Sound and see how people are living. Go up to Kenora and see how people are living on Indian reserves before you attack the pipelines or anybody else. If we took care of our own First Nations here, instead of looking after very wealthy that live in Bridle Path, pay very little taxes, pay no taxes when they sell their million-dollar houses, we'd have a much better world than people that come here and say, "We represent all the shareholders." They're against any industry that helps any place else in Canada but Toronto. Thank you. I'm not sure of the question there. Thank you for your comments. I think my comments previously represent how we look at overall development in the country, but I think your comments are probably more directed to our governments than they are from, what I take it, to any corporate leaders. Are you- Yes. Just a general statement. Okay. Thank you for your comment. Thank you. 15. My name is Lyman Martin. I am a proxy owner. I have a question about the five different elements of Royal Bank, and it doesn't appear that there is anybody below you that a person can talk to go between each pillar of the bank. Is there anybody below you that has the ability to cross over the lines? You mean to help you as a customer navigate other parts of the organization? Or are you talking about how we lead at a more senior level? I am saying that if wealth management, banking, insurance, et cetera. There does not seem to be a place that anybody can talk to somebody, like cruise lines. Cruise lines have families and relatives, and they give you the ability to help other people do things. I would like to be able to, or I think some of the shareholders would be happy to bring business to Royal Bank if we had a good reason to do it. If we can have a package between the insurance, the Visa, et cetera, I think that would greatly enhance Royal Bank's ability to draw clients. We, as shareholders, are the people that should be selling products. Not the tellers or anybody else. It should be us. Yeah. Glad to be able to do it. Thank you. Thank you for your question. It would be great if we could have all our shareholders out advocating for our products. I think that's a wonderful idea and communicate that more broadly. So thank you for that suggestion. It's a great point. There are some regulatory barriers between communicating, particularly between insurance and banking, that we cannot, in all cases, communicate the features and benefits of all our products across each customer with one point of contact. But you raise a very good point, and we strive to do that through our reward systems, through how we structure the roles in our branches to offer the services of the entire organization to refer those clients to the appropriate person within the organization. I would say we might do it inconsistently at times, depending on the experience of a leader and the role of a leader, but it certainly is our objective. I think the best proof point I can do that we do it better than anybody else is that we look at the cross-sell metrics that Ipsos Reid produces every year, which bank has the most success in cross-selling and other services, in wealth services, insurance services, banking services, lending services to a customer. We have been at the top of the cross-sell success tree for at least 5 or 6 years, with at least, I think, a 30% gap between us and the second-place bank who does that. We do it better than others, but I take your point that we can do it better, and I think it's a big part of what Neil and Jennifer have strived to do. So thank you for your input. We can always improve, and we'll continue to strive for that. We'll get our shareholders working for us, too, which will help. So I love it. Thank you. Is that anything else? Okay. Kate, I'll turn it back to you. Thank you very much. Thank you for your questions. Is it on? It is now. Thank you for your participation in that important session. I am now going to call on Joe Chirico to report the preliminary voting results, which will also be posted on the screens. Final results will be posted on the bank's website. Joe? For the information of shareholders, the scrutineers wish to report that 773 million, 776 thousand, 575 shares, or 52.18% of eligible shares have been voted at this meeting. The results for the election of directors are a substantial majority of the votes cast at the meeting were voted in favor of each of the 13 nominees named in the management proxy circular, with each nominee receiving in excess of 98.27% in favor. The results for the appointment of auditor are 99.69% voted in favor of PricewaterhouseCoopers LLP, and 0.31% withheld from voting. The results for the advisory vote on approach to executive compensation, 95.25% voted in favor, and 4.75% voted against. The results for the shareholder proposal. Proposal number 1, withdrawal from tax havens. 2.03% voted in favor, 97.97% voted against, and less than 5.3 million abstained from voting. Proposal number 2, lobbying. 42.26% voted in favor, 57.74% voted against, and less than 5.3 million abstained from voting. Proposal number 3, binding shareholder vote on executive compensation. 3.37% voted in favor, 96.63% voted against, and less than 4.3 million abstained from voting. Shareholder proposal number 4, board size bylaw. 2.63% voted in favor, 97.37% voted against, and less than 4.4 million abstained from voting. Proposal number 5, proxy access bylaw. 46.83% voted in favor, 53.17% voted against, and less than 4.9 million abstained from voting. Proposal number 6, shareholder approval of retirement and severance agreements. 4.15% voted in favor, 95.85% voted against, and less than 4.7 million abstained from voting. Proposal number 7, placement of shareholder proposals in circular. 3.07% voted in favor, 96.93% voted against, and less than 5.1 million abstained from voting. Thank you, Joe. I now declare that the 13 nominees named in the circular have been duly elected as directors. PricewaterhouseCoopers LLP has been appointed as the auditor for the 2017 fiscal year. The advisory vote on the bank's approach to executive compensation has been approved, and the shareholders' proposals have been defeated. Earlier today, I commented on proposal number 2 on lobbying disclosure and on number 5 on proxy access. Your board will be considering how best to give effect to the views expressed today by shareholders on these important issues as well as others. Ladies and gentlemen, I want to sincerely thank all of you for your participation today. I will conclude by expressing on behalf of all of us our sincere appreciation to RBC employees whose dedication and commitment to the success of our clients continues to be a true competitive advantage for the organization. On behalf of the board and our shareholders, thanks all of you RBCers for being with us today and for your efforts and your team's efforts in contributing to RBC's success. Also, on behalf of the board and RBC's employees and shareholders, I would like to thank you, Dave, not only for your strong leadership of RBC and service to clients but also for your personal commitment to so many causes directly affecting our communities. In particular today, we heard about RBC Future Launch, and I know that with Dave's leadership, this will make a real and lasting impact, helping our young people as they face a rapidly changing future. Thank you, Dave. The meeting is now concluded.