AGM 2015

Apr 10, 2015

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. Good morning, ladies and gentlemen. Mesdames and messieurs, bonjour. Welcome to our annual and special meeting of common shareholders. I'm Katie Taylor, Chair of the Board of Royal Bank of Canada. I'm pleased that so many of you could join us here in the room today, and many more are on the webcast with us as well. As notice of the meeting has been duly given and a quorum is present, I call the meeting to order. Speakers may address the 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 one, and French on channel two. After my introductory remarks, Dave McKay, our President and CEO, 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 and a resolution to implement changes to our variable compensation for approximately 75 RBC employees who work in the U.K. We will then consider the shareholder proposals and deal with any other business, including questions from our 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 to limit your remarks to three minutes. At the appropriate time, if you'd like to ask a question, please proceed to a microphone and give us your name, then tell us whether you are a shareholder or a proxy holder. I'd like to take a moment to introduce the others who are here on the podium. From left to right, we have Janice Fukakusa, Chief Administrative Officer and 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 Secretary. Peter Pacifico and Joe Curaco, 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. At this time, I'd also like to introduce the representatives of our auditor. Joining us today from Deloitte, we have Richard Nunn, Frank Vettese, and David Berrey. Before proceeding with today's business, I'd like to pay special tribute to one of our most experienced directors, who is retiring from the board today, and say a few words about him. Tim Hearn has been a director of Royal Bank since 2006, and over the past 9 years, he has made an outstanding contribution to our board of directors. His experience gained through a long and distinguished career at Imperial Oil as Chairman, President, and Chief Executive Officer, positioned him to add significant value to RBC and provide expert business advice to the board and senior management. During his 9 years on our board, Tim served on our audit, risk, and governance committees, where he made his mark as well. Thank you, Tim, for his inspiring leadership, strong contribution, and dedicated service. Please join me in thanking Tim Hearn for his contributions to RBC's success. Since we last met with you, your board of directors has maintained its strong focus on strategic oversight and on ensuring that business decisions and initiatives align with RBC's risk appetite. In 2014, our governance committee led a comprehensive review of governance policies and procedures, leading to a number of enhancements, including separating the roles of the board chair and the chair of the governance committee, and adopting a new approach to board composition and renewal. We remain committed to enhancing the diversity of experience, perspectives, and skill sets represented on your board. This year, we increased our objective for women on the board to at least 30%, up from 25% last year, and 5 of our 15, or 33% of our nominees today are women. Another important initiative of the board relates to RBC's auditor. In January of this year, we announced that we'd be conducting a tender process for external audit services for the 2016 fiscal year. The incumbent firm, Deloitte LLP, has consistently provided a high level of quality and expertise as our auditor. Along with 3 other firms, Deloitte is participating in the tender process for 2016, which is still underway. The resolution we'll be voting on later this morning is to confirm the auditor for the 2015 fiscal year. If the tender process results in a new audit firm, a transition process will begin in the first quarter of our 2016 fiscal year. Another of the board's fundamental responsibilities is succession planning. During 2014, there were a number of changes within group executive. The well-planned and orderly succession process demonstrates the depth of the talent pool at RBC and our commitment to developing leaders of the future. As you know, Dave McKay succeeded Gord Nixon to become President and CEO. Over his first 8 months, Dave has continued to demonstrate his passionate commitment to putting clients first. He challenges his leadership team to understand how the industry is changing to ensure RBC will continue to lead in an evolving environment. The strong financial results in 2014 and the first quarter of this year speak for themselves. Just before I call on Dave to talk about the bank's performance and outlook, I would like to extend a special welcome to the students who are joining us this morning from Oakridge Secondary School in London, Ontario, and from Loretto Abbey Catholic Secondary School in Toronto. One of Canada's greatest resources is our youth. Your talent, ambition, and energy will drive our country's long-term prosperity. RBC is passionate about investing in your future, so welcome and thank you again for coming. It is now time to hear from Dave McKay. Well, thank you, Katie, and welcome to our 146th annual meeting of shareholders. I am honored to be here for the first time as CEO. Over the last 8 months, I have met employees, clients, and shareholders of RBC from throughout the country, and I learn every day about the health of our wonderful company. I would like to share with you a few discoveries that I have made and give you an overview of our situation, talk to you about the major trends in this sector, and see how RBC is preparing for the future of significant change in our industry and in the world around us. The good news is we are tackling the future from a position of unprecedented strength, growing across all our lines of business, investing in new technologies, and using the digital revolution to enhance our ability to serve clients. Today, RBC is a global leader, the 14th largest bank in the world by market capitalization. We have a strong balance sheet, quality earnings, and consistent growth. That, combined with our outstanding employees, make for a great competitive advantage. You can see by the numbers on the screen that we had an exceptional year in 2014. Record earnings, strong shareholder return, and a 12% increase in the dividend. We did this while maintaining a robust capital ratio. This performance has continued into our 2015 fiscal year with record first quarter earnings of almost CAD 2.5 billion. The story behind the numbers is one of continued diversification among our strong franchises in retail banking, wealth management, capital markets, insurance, and Investor & Treasury Services. Each continues to excel in client service while maintaining a disciplined approach to risk and a healthy appetite for innovation. Despite the low interest rate environment, our Canadian banking operation delivered record results, growing our market share in all categories and enhancing our already superior cross-selling capabilities. As a leader and a retail leader in Canada, we hold the top position in consumer lending, business loans, business deposits, and long-term mutual funds. We also increased our customer service score for the eighth year in a row. Our insurance division earned a record CAD 781 million last year, is now one of the most recognized bank-owned brands anywhere. Our Caribbean banking operation is being repositioned and strengthened and in Q1 produced a profit. We believe we know what people want in a bank: service, convenience, and advice, which in turn creates value for money. Our superb customer service levels were a big part of RBC being named in 2014 as Retail Bank of the Year by Retail Banker International. This was the first time a Canadian bank has ever won this global award. The award highlighted once again that banking is about much more than transactions. It is about long-term relationships that instill confidence and help fulfill dreams. We see that value in wealth management, which produced record earnings in 2014. Our wealth group surpassed $1 billion in earnings for the first time thanks to the performance of our global asset management arm, as well as our Canadian full-service retail franchise. Globally, our asset management business is now among the top 50 in the world, among the fastest-growing, with a third of assets under management now coming from the U.S. and international clients. This global capability has also helped us extend our number one position in Canadian retail asset management business. In Canada, we expanded our share of the high-net-worth segment to 19%, up about 4 percentage points in just 4 years. In the U.S., we are a top full-service wealth manager poised to deepen our client relationships and share of wallet through the pending combination with City National. RBC Capital Markets had an outstanding year, generating record profit and being named by The Economist as the world's most trusted investment bank. We are the leading investment bank in Canada, a top 10 investment bank in the United States, where our brand, reputation, and expertise is now sufficiently established to earn us opportunities to win world-class business. Combined with our growing presence in Europe, this international reach has allowed us to help Canadian clients finance themselves globally, and in turn, help Canada to be a more competitive part of the world economy. As Canada's leading financial gateway with the world, our Investor & Treasury Services business maintained its market leadership at home while enhancing its top 10 position among global custodians from our centers of excellence in Dublin and in Luxembourg. We delivered these results while staying within our risk appetite. This comes from taking the time to truly get to know our clients and to understand their challenges in good times and in bad. We also lend prudently, carefully extending our balance sheet to ensure the bank's soundness. As we have expanded, we have stayed very focused on managing the trajectory of expenses against revenue growth. Our investment in technology is driving productivity and steadily improving our efficiency ratio, which continues to be an industry best in Canadian banking. We are shipping 20 million fewer documents a year, saving transportation, processing, and paper costs. The introduction last year of e-signatures for many accounts has led to an estimated savings of up to 24,000 hours per week in administration time. The biggest gains have come thanks to our employees. We have demonstrated repeatedly over the years that everything we do and achieve is through our employees, who champion our vision and who live our values. We are proud of our culture of diversity and inclusion, a culture that not only helps us attract, retain, and develop the best employees, but one that mirrors the values of our clients and our communities. Our employees' commitment to our values, service, teamwork, responsibility, diversity, and integrity is the power behind RBC's strategy and its success. In a world of change, that strategy is clear and it is confident. First, we are the undisputed leader in financial services in Canada. Even in a mature market, we see opportunities through growing segments such as retirees, newcomers, and business owners, and with a sharper focus on simplifying, digitizing, and personalizing what we offer. Second, we serve corporate, institutional, and an affluent clientele in the U.S. through our top 10 positions in capital markets and in wealth management. We see it as our second home market. Third, in target markets, we are a leading provider of select financial services that are complementary to our core strengths, particularly for our capital markets and wealth management groups in global financial centers. Our strategy has worked for many years because it is consistent, disciplined, focused on long-term customer needs, and proven in its execution. Our diversified business model will remain critical to our success as the outlook for the global economy remains uncertain. In Canada, the drop in oil markets has already led to a sharp decline in energy investment this year. But while shifts in the Canadian economy make for a more challenging year, we expect moderate growth, driven in part by an upswing in manufacturing and overall exports. You cannot talk about the Canadian economy without talking about housing. Despite a softening in some regions due to the decline in oil prices, overall, the Canadian housing market is supported by strong trends in employment, household income, population growth, and low interest rates. Buyers and sellers are generally well-aligned in most resale markets, and construction of single and multi-family homes has been broadly absorbed. Low rates and a limited supply of single-family homes in some large markets are leading to price increases that bear watching, as we do expect higher rates over time to temper the market. Longer term, Canada remains fundamentally strong and has been outpacing the U.S. in terms of productivity growth. This is a positive trend that can offset swings in commodity prices, especially as the U.S. economy grows. Canada will continue to benefit from its commitment to tax reform, tax relief, broader trade agreements, and deficit reduction. We believe the U.S. economy will outpace Canada this year and likely next, thanks largely to sustained employment growth, rising incomes, and growing consumer confidence. But let us be clear, America's resilience is about more than consumption. The U.S. economy, whether it is in technology or energy or entertainment, continues to explore, experiment, create, and reinvent itself in the 21st century. That is why we set out a couple of years ago to find a partner who could help us expand our role in the world's largest economy. We found that partner in City National Bank. As a private and commercial bank, City National deserves its storied reputation. It is a strong franchise with a conservative risk culture and an impressive business record based on an ability to serve America's best and brightest entrepreneurs and professionals. Its mission is to bank success. In City National, we saw a franchise that is beautifully positioned to grow with America and grow with RBC. I first met City National's CEO, Russell Goldsmith, two summers ago and felt like I was getting a chance to look in the corporate mirror. His bank's values reflect RBC's values. Like RBC, they put clients first, and they believe in the best traditions of banking, helping families, communities, and businesses meet their aspirations. They call it The Way Up, and we call it Your Someday. The combination of our two companies, which is subject to approval by regulators and City National shareholders, will be powerful and will position RBC to expand significantly over the coming decade in the most attractive segment of the most attractive, and yes, competitive financial market in the world. For RBC's 2,000 financial advisors in the U.S., we will be able to harness City National's renowned private and commercial banking skills, services we currently cannot offer to our 350,000 wealth management clients. We look forward to seeing City National take advantage of RBC's global strength in asset management and in capital markets, as together, we seek to serve Americans in need of sophisticated, high-touch financial advice and solutions. The combination will position us well in major U.S. centers from Los Angeles and San Francisco to Houston, Atlanta, and New York. In future, will help us expand in London, where we think City National's impeccable private banking skills and RBC's standing in capital markets and wealth management will be formidable. Let me turn to the road ahead and the journey that will take us through a more volatile and complex world. Whether it is in our home markets or abroad, the next chapter of banking will be shaped by two dominant trends, demographics and digital disruption. We can see a dramatic demographic shift is already underway. The great gray moment that we read about for years is upon us. This year, the beginning of the baby boom bulge, those born in the 1950s, will be hitting the traditional retirement age, and their numbers will quickly accelerate. Within a generation, the proportion of Canadians aged 65 and older, now 15% of the population, is projected to grow to 25%. Put simply, we need to prepare for a time when one-quarter of Canadians will be in their golden years. Not surprisingly, the boomers are seeking financial and investment advice to support a longer, more comfortable retirement while also ensuring their lifetime of hard work is shared with future generations. At the same time, their younger peers are facing increased personal responsibility for retirement. Seeing these trends, our employees responded with new approaches and solutions for clients, such as a comprehensive planning tool including Your Future by Design, which gives us a deeper understanding of individual and family goals. In an increasingly complex world, no one can promise certainty, but our advisors can deliver confidence and transparency. We are also preparing for a big shift in business ownership. Over the next decade, more than 45% of Canadian businesses are expected to change hands. We'll be there for those owners as they plan for succession, working with them to find a buyer, finance the transaction, and manage their new wealth. This is not just a retirement phenomenon. The millennials, people born between 1981 and 2000, are moving into the center of society and the economy, exhibiting a different approach to financial services than previous generations. They want a financial services provider who can anticipate their needs and be where they're going before they get there. They expect finance to be an intuitive part of their lives. While our populations are changing, the ability of financial institutions to move with the market and to be more intuitive in a digital economy is being tested once again. It's no exaggeration to say we're in the midst of the greatest technological change since the advent of electricity, and much of it is rooted in the smartphone and mobile commerce. Over the course of today, most of us will check our mobile phones between 150 and 200 times. Through this single device, many of you will conduct business meetings, share private thoughts, be entertained, publish reviews on all sorts of things, shop, snap, book, buy, comment, and yes, bank, all in ways that could not have been imagined a decade ago. One of the areas of greatest change brought by the smartphone is payments, and RBC has been at the forefront. We were North America's first financial institution to implement a peer-to-peer capability on a social network using Facebook Messenger, and we're the first in Canada to offer consumers mobile options for credit, debit, and peer-to-peer payments. This is just the start. We continue to reposition RBC in a mobile society and to compete with technology firms that have expanded into the money-moving business, and yet who do not bear the financial and social costs of a deposit-taking organization, nor the obligations of financial regulation. Many of these new entrants are excellent competitors, innovative, driven, and responsive to their clients, but they also may distort the financial system with unintended risks that regulators cannot clearly see. At RBC, our ethos of innovation is straightforward: to move at the speed of our clients' lives without jeopardizing the security and trust that millions place on us every day. We can't do that alone. We can't build the bank of the future if we're not part of a thriving ecosystem of entrepreneurs, innovators, engineers, and market visionaries pushing, prodding, and inspiring each other. We need our governments to redouble their commitment to an era of innovation through tax policy and regulatory structure. We need universities and colleges to continue to seize the digital age through applied research, integrated thinking across faculties, and inspired teaching of a new generation of engineers and entrepreneurs. We need large organizations in the public sector and business, RBC included, to work closely with early-stage companies, even the ones trying to disrupt us, to support, mentor, and motivate their progress. In short, we need all Canadians to see that this is the new century. In this new economy, there's a wonderful opportunity for a new Canada to thrive. This is more than a question of innovation in a digital era. It's a matter of economic competitiveness for all of Canada to ensure that we are creating and enhancing the jobs of the 21st century that will support sustainable communities and a prosperous society. The pillars we know will make Canada a model for generations to come. For our part, RBC is a proud partner of initiatives like Communitech in Waterloo and the entrepreneurship program at the University of Calgary. We also recently joined forces with the C100, a group of Canadian entrepreneurs in Silicon Valley who, like us, want to build bridges between the digital pioneers of Canada and those of the world. As our lead sponsor, we're working with technology entrepreneurs in the U.S. and Canada to help ensure Canadians remain at the forefront of this remarkable revolution. You'll hear a lot more from us in the year ahead on steps we'll be taking within RBC to up our game and help Canada up its game for the digital future. The confluence of shifting demographics and growing digital expectations is changing the landscape of banking. It's also allowing us to return to banking's roots to focus on helping people navigate their dreams and harness their ambitions. This human capacity is why we invest so passionately in the communities around us. As Canada's largest corporate donor, RBC last year provided more than CAD 100 million to a wide range of charitable projects across Canada and around the globe. We've carved out two key areas of special focus that we believe can transform that world: kids and youth and fresh water. The RBC Kids Pledge is a landmark CAD 100 million commitment to improve the well-being of at least one million kids and youth over five years. We're investing in a variety of initiatives from mental health to after-school programs, sports, and education. The RBC Blue Water Project is a 10-year, CAD 50 million commitment to protect fresh water, which has already helped more than 700 water organizations in Canada and around the world. It's a great source of pride to me to see our employees and retirees work so enthusiastically to support their own causes and RBC's. They raised a record CAD 15.3 million last year for United Way campaigns, on top of the CAD 4.1 million contributed by the RBC Foundation, the most of any corporate donor. The Race for the Kids is a great example of how our colleagues get involved to support children's causes around the globe. The first RBC Race for the Kids was launched in New York six years ago and has spread to seven cities and five countries, attracting more than 50,000 participants to date and raising over CAD 13.5 million for children's charities around the world. RBCers are on it. Whether it's running for kids, planting trees for water, or mentoring youth, they're striving to make the world better for generations to come. Ladies and gentlemen, it's been a pleasure to share RBC's results and ambitions with you today to tell you a bit more of our story. Much has changed since RBC was incorporated in 1869, and much will change in the decades ahead. But at least one constant endures, and that is RBC's commitment to investing in the future. We have a strong business and a clear strategy to succeed. My first year as CEO, I've seen a unique level of trust and confidence among our employees as they talk with clients about the future. They understand RBC's strengths and our challenges and are using this moment in our history to build an even stronger bank. Thank you to our board, clients, shareholders, and employees for the success of the past year and the confidence to take RBC's great story into the future. Shareholders, and employees for the success of the past year, and the confidence to take RBC's great story into the future. Now I'll turn the meeting back over to Katie. Thank you. Thank you, Dave. Now we'll proceed to the next item on our agenda. 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 another matter, please wait until the time provided for shareholder questions following the formal legal business of the meeting. If you have a question on the 2014 financial statements, please proceed to the nearest microphone, tell us your name, and whether you are a shareholder or a proxy holder. Surendra. Shareholder. Sorry, number 5. I'm Surendra, shareholder. More than 50% of the RBC earning is from retail lending, and mortgage represent 65% of the retail lending. Only 1% of the RBC retail lending is to small business, hardly enough to create jobs and growth that can help to service the mortgage debt. Over the years, Bank of Canada, the bank regulator, independent and international agencies like IMF, OECD, have expressed concern on the possibility of disorderly housing market correction over banks' rapid growth mortgage portfolio in recession and in the recent current sluggish economy. They are now proposing macroprudential oversight to link various federal agencies that may address the deficiency for a long-tenured directors and auditor relationship with management. An anti-fraud survey found less than 50% of auditors have confidence in the Canadian director audit committee identifying materially significant misstatement in the financial statement due to fraud. Only 5% of the time an external auditor detect fraud due to lack of experience in investigating and forensic auditing, tight budget, and deadline. What is clear is the decades-long relationship directors and auditors had with management made them lose their independence and professional skepticism. Long tenure made directors and auditors think and act like management. I would therefore ask the board to consider adapting the global guidelines by setting 9-year time limit for directors, mandatory rotation of auditors, and capping executive bonus to a maximum of 100 of the basic salary as a way to serve all stakeholders. Thank you very much for your comments and your advice. As disclosed in the proxy circular, the board does look at all of these issues, director tenure, auditor tenure, and the other comments you made are reasonably well covered. I think you have heard us and read in the proxy, listened to us speak about the board's approach to that. RBC does have director tenure limits, which were adopted a number of years ago as best practice here in Canada. The Canadian environment does not support mandatory auditor rotation. Having said that, highly encouraged is intense auditor evaluation, which our audit committee conducts annually, as well as management annually with respect to the performance of the auditor. Our approach to compensation, and the ratio of variable to fixed compensation in our various programs across the bank, I think are serving the bank extremely well. I thank you for all of your comments, and we will remain abreast as a board of all of those issues as they continue to emerge. Thank you very much. Are there any other questions on the financial statements? As there are no further questions, we will proceed with the business of the meeting. You have received the notice of meeting and proxy circular, which specify the matters to be considered at this meeting. I will now ask Karen McCarthy to review the voting procedures. 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 received ballots at the registration desk this morning. 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 proxyholders are entitled to propose or second motions. A simple majority is required to approve matters voted on, except the resolution to implement changes to variable compensation for certain RBC employees in the U.K., which must be approved by 75% of the shares represented here today. Thank you, Karen. To facilitate proceedings, we have asked a select group of RBC employees, who are shareholders or proxyholders, to move and second motions. I will call on them at the appropriate time. The first item of business is the election of directors. The number of directors to be elected has been fixed by the board at 15, and two of the nominees are standing for election for the first time. Jacynthe Côté was President and Chief Executive Officer of Rio Tinto Alcan from 2009 until 2014. Jacynthe joined Alcan in 1988 and brings to our board valuable experience gained by serving in a number of progressively more senior leadership roles during her 26-year career, including positions in human resources, environmental health and safety, business planning, development, and production in Canada and the U.K. Toos N. Daruvala is a Director and Senior Partner of McKinsey & Company based in New York City. He currently leads McKinsey's risk management practice in the Americas, and from 2005 to 2011, led their banking and securities practice in the Americas as well. Since joining McKinsey in 1983, Toos has advised a broad range of financial institutions on matters of corporate strategy, operational performance, improvement, and organizational effectiveness. We value the expertise that Jacynthe and Toos bring to the RBC board, and we are pleased to welcome them. Biographies of each of the nominees begin on page nine of the circular. I will now ask Karen to read the names of those proposed for election as directors, and I would ask them to stand and remain standing as the names are called. Madam Chair, the following individuals are proposed for election as directors: W. Geoffrey Beattie, Jacynthe Côté, Toos N. Daruvala, David F. Denison, Richard L. George, Alice D. Laberge, Michael H. McCain, Dave McKay, Heather Munroe-Blum, J. Pedro Reinhard, Thomas A. Renyi, Edward Sonshine, Kathleen Taylor, Bridget A. van Kralingen, and Victor L. Young. Thank you, Karen. I will now ask Tariq Khan and Chen Yang to nominate the directors. Madam Chair, my name is Tariq Khan. I have worked with RBC for 13 years, and currently, I am Senior Manager of Strategy at RBC Insurance. I am pleased to nominate each of the persons named by the Secretary of the bank 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. Madam Chair, my name is Chen Yang. I have been with RBC for 5 years, and I'm currently Senior Director of Governance and Regulatory Management in Wealth Management. I second the nominations. Thank you. Thank you. The nominations have been made and seconded. Are there any other nominations. I'll now ask Yvette Holt and Anna Judek to make a motion to close the nominations. Madam Chair, my name is Yvette Holt. I have been with the bank for 27 years, and I'm currently Senior Business Strategist in Canadian Banking, supporting our deposits and investments businesses. If there are no further nominations, I move that the nominations be closed, and that each of the persons nominated be elected 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. Madam Chair, my name is Anna Judek, and I've worked with RBC for six years. I'm currently Director of co-brand partnerships in digital payments and cards in Canadian banking. I second the motion. Thank you. The motion has been made and seconded. Is there any discussion? We will then now proceed with the vote. Oh, I'm sorry. Microphone number 5. I'm Surendra again. In 2012, RBC directors who have served for decades became born-again directors for an additional 15 years. 43% of directors have served more than 10 years. Major corporations like S&P 500, the average tenure of directors in 2012 and 2013 is only 8.6. In U.K., the average tenure of non-executive directors is 4.5 in 2012. 75% of investors surveyed by the Institutional Shareholder Services consider long director tenure to be problematic. Growing number of countries have adopted tenure-related guidelines, even restriction for independent directors. Therefore, at RBC, we're having long tenure directorship that will negatively affect a company's rating. Secondly, RBC directors consist of billionaires, those who serve billionaire-controlled corporation, and all conglomerates. No director seems to stand up against continued increase in client fees and interest. The board must represent wide segment of the society to serve the interest of all stakeholders. Thank you very much for your comments. Thank you. We'll now proceed with the vote on ballot A. Please mark your vote on the election of directors. I would ask that you keep your ballots until the resolution regarding changes to variable compensation for certain RBC employees in the U.K. when they will be collected. The next item on the agenda is the appointment of the auditor. I'll now ask Manju Jessa and Leona McCharles to make a motion for the appointment of the auditor. Madam Chair, my name is Manju Jessa. I have worked with RBC for six years, and I'm currently Assistant General Counsel. I move that Deloitte LLP be appointed auditor of the bank until the close of the annual meeting of common shareholders. Madam Chair, my name is Leona McCharles. I've worked with RBC for three years, and I'm currently Program Director, Technology Strategy Transformation in Technology and Operations. I second the motion. Thank you. 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. We hope that you have had a chance to review our compensation discussion and analysis in this year's proxy 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 advisor. In considering our approach to compensation in the future, the board will take into account the results of this vote, together with other feedback received from shareholders. I will now ask Tania Sinha and Russ McNally to make a motion to approve this resolution. Madam Chair, my name is Tania Sinha. I have worked with RBC for over 12 years, and I am currently Senior Manager, Strategy and Transformation Services within Enterprise Services. 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 and special meeting of common shareholders. Madam Chair, my name is Russ McNally. I work with RBC for over 10 years and currently Senior Human Resources Business Partner within Canadian Banking. I second the motion. Thank you. The motion has been moved and seconded. Is there any discussion? Microphone number five. Srinta again. As I mentioned to you, 50% of the RBC lending is from retail lending, and residential mortgage represent 65% of the retail lending. The executive compensation paid to the CEO, CMHC is about CAD 400,000, who underwrite RBC mortgage risk that help the CEO, RBC to earn risk-free interest and transfer losses to taxpayers. Yet the former CEO, RBC earned an annual average of CAD 11 million annually over the last two years. That is 27 times that of the CEO, CMHC, who was responsible for mortgages held by all Canadians' banks. Therefore, paying such a huge compensation doesn't make sense. This type of gap between the CEO and the teller widen the gap between the rich and the poor, and that was the main concern at Davos in Switzerland this year. RBC client fees and interests are going up again this June to pay for this compensation. I would appreciate that, as in Europe, the compensation for the CEO should be kept at 100 times the salary. Thank you again for your comments. As I mentioned earlier, the principles that RBC employs in our compensation plans are disclosed for shareholders in our circular, and we appreciate your comments, and thanks for coming. Thank you. We'll now proceed with the vote. On ballot A, please mark your vote on our approach to executive compensation. The next item of business on the agenda is the resolution to implement changes to variable compensation for certain RBC employees in the U.K. As explained on page eight of the proxy circular, this resolution is to comply with regulations in the U.K., which limit the ratio between fixed and variable compensation to 1:1. For U.K. staff whose roles have a material impact on the risk profile of RBC. If approved, this resolution will give the bank flexibility to set a higher ratio, up to a maximum of 2:1 between variable and fixed components of total compensation. The resolution affects a very small portion of RBC employees, approximately 75 people in the U.K. We are seeking this higher ratio for variable compensation as it's consistent with our overall compensation principles and ensures that a greater portion of pay for these individuals continues to be aligned with performance and subject to adjustment in forfeiture and clawback provisions. This will also provide RBC with the ability to better manage our fixed compensation costs. The proposed higher ratio aligns with market practices in the U.K., supporting our ongoing ability to attract and retain talent. A number of major European banks have already received shareholder approval for this higher ratio. I'll now ask Mike Elsey and Garima Singh to make a motion to approve this resolution. Madam Chair, my name is Mike Elsey. I've worked with RBC for over five years, and I'm currently an associate in corporate banking within capital markets. I move that Royal Bank of Canada, in determining the variable compensation of individuals classified as remuneration code staff in accordance with United Kingdom Prudential Regulation Authority' Remuneration Code, is authorized to apply a ratio of the fixed to variable components of total compensation for such an individual that exceeds 1:1, so long as the ratio does not exceed 1:2 for that individual. Madam Chair, my name is Garima Singh. I have worked with RBC for over two years, and I am currently business lead on risk data aggregation program within group risk management. I second the motion. Thank you. 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 resolution to implement changes to variable compensation for certain RBC employees in the U.K. I would now ask the scrutineers to collect the ballots. I cannot hear him. Can you hear him? Are there any more ballots to be collected? I see one up here. Any more ballots? One more there. All right. I think we have got them all. Thank you very much. The voting is now closed for the election of directors, the appointment of the auditor, the advisory resolution on our approach to executive compensation, and the resolution to implement changes to variable compensation for certain RBC employees in the U.K. We will now move on to the two shareholder proposals submitted by Mouvement d'éducation et de défense des actionnaires, which is represented here today by Hélène Dufresne. Madame Dufresne. Shareholders have had an opportunity to read the proposals and the board's responses and voting recommendations, which are set out in the proxy circular on page 102. Madame Dufresne, I would ask that you take no more than 10 minutes to speak to the merits of both of your proposals, and we will then open the floor for discussion. Shareholders may wish to vote on these proposals by marking ballot B as they are presented. We will collect the ballots following the discussion of both proposals. Madame Dufresne. Bonjour madame, bonjour monsieur. Good morning, ladies and gentlemen. I am Hélène Dufresne, and I am a member of the MEDAC, and the MEDAC is a shareholder of the Royal Bank. The first proposal deals with the compensation report. It is proposed that the bank adopt an executive compensation policy that makes annual use of the pay equity ratio as a yardstick for setting compensation to demonstrate to shareholders that the bank's executive compensation strategy is fair and equitable. Based on our analysis of management proxy circulars, we conclude that the exercise of fixing the compensation of executive officers depends heavily on horizontal benchmarking with their peers at companies said to be similar. Such a method leads to continually rising compensation because it triggers increases every time one company awards compensation that is higher than the median for their group. Several observers of good governance practices have criticized the virtually exclusive use of this method. It is a method that results in mounting discrepancy between the compensation of the Chief Executive Officer and the average employee compensation, thereby creating an issue of injustice within the company and causing the economy to dysfunction, as there are fewer workers with sufficient purchasing power to buy what the economy is capable of producing, which was a contributing factor in the recent financial crisis. As Yvan Allaire has written, "In the past, compensation systems were designed in a spirit of internal equity and not based on a supposed talent market. We should go back to compensation methods that help to encourage and protect solidarity, mutual trust, and a sense of equity within and around the company to develop a conviction among the members of the organization that they are all in the same boat, and to lead them to share a long-term vision." Last year, six major Canadian banks, being aware of the concerns raised by this method, directed Meridian, a compensation firm, to analyze this issue and make recommendations. While defending the relevance of horizontal benchmarking, Meridian suggested, "Sufficient as a primary basis for setting executive compensation, it can provide important context for a committee, particularly in assessing trends in pay disparity." Considering the advantages of comparing executive compensation with the compensation of other employees of the bank, we propose that the bank's policy provide for the systematic use of the pay equity ratio, being the ratio between the CEO's total compensation and the median income of the bank's employees. Thank you very much. You can now speak to your second proposal. The second proposal deals with stock options. It is proposed that over a period of five years, the board of directors abolish stock options as a form of compensation and replace them with a compensation formula that focuses on the institution's long-term performance. At the outset, it is worth mentioning that academic literature in the middle of the last century discussed executive compensation principally in the form of salary and treated incentive pay with great caution. In the early 20th century, business articles and textbooks, one finds references to executive salaries. Mention of incentives in cash, stock, or options is an exception. As a management professor stated in 1951, it is usually unwise to have a large proportion of executive pay consist of incentives. Variable compensation started to develop in the 1980s, and stock options or other equity-based compensation grew in popularity as tools for setting executive compensation. In a generally bull market, this formula certainly contributed to constantly increasing compensation. Moreover, as Professor Yvan Allaire commented in the paper entitled "Pay for Value: Cutting the Gordian Knot of Executive Compensation," stock options tend to reward luck as much as performance. A booming stock market lifts all boats, all the banks. Unless the exercise prices of stock options are indexed to some stock market index, a rare practice that raises some thorny questions, lucky executives who happen to live through one of these recurring phases of stock market exuberance will become very rich. Those who happen to spend a good deal of their career when stock markets are in the doldrums will not be so lucky. One is entitled to question the need for so much emphasis on variable compensation, given that it promotes excessive risk-taking, and a number of commentators have suggested that it was one of the contributing risk factors to the last financial crisis. Provided by incentive compensation arrangements in the financial industry were a contribution factor to the financial crisis that began in 2007. Since these incentives, as NEI Investments says so well, are, quote, "complex, highly susceptible to manipulation, and have the effect of excessively rewarding executive directors on the basis of a single and questionable performance metric," end quote, we propose to phase out stock options. Thank you very much. Before I open the floor to further discussion on these proposals, John Mountain of NEI Investments had asked to address the meeting regarding shareholder proposal number one in vertical pay ratios. Mr. Mountain Thank you, Madam Chair. My name is John Mountain, and I represent NEI Investments. I would like to comment in the context of the shareholder proposal asking RBC to adopt a pay equity ratio. NEI Investments is concerned that prevailing approaches to setting executive compensation have led to excessive pay quantum and contributed to income inequality. We believe unreasonable pay disparity can undermine a company team as well as damaging its reputation. Many experts also suggest that income inequality harms the economy over the long term. In 2012, with Mr. Bill Davis and the United Church of Canada, we filed shareholder proposals at Canada's largest banks, including RBC. We asked the banks to review how horizontal peer group benchmarking could contribute to excessive compensation and to explore the potential of vertical comparisons to pay within the company. We withdrew the proposals when the banks agreed to explore these issues. We are pleased to see that Canadian banks now disclose use of vertical comparisons in compensation decision-making. We would like more detail on the metrics and how they influence pay, but this is progress, and we thank RBC for being open to engagement. Although we share concerns about pay disparity, NEI could not fully support the proposal on the ballot today. We have doubts about the specific vertical metric proposed, the CEO to median worker comparison. We do not think this metric will be comparable across different sectors or even across companies within the same sector that utilize different pay structures. Also, in sectors employing many skilled workers, such as financial services, the ratio may seem relatively low, reducing the incentive to moderate executive pay. We would like to encourage RBC to disclose more detail on its vertical metrics, the trends they reveal, and how this information influences pay. This is important for shareholders like us who take equitable compensation into account in proxy voting. It would also support development of good practices in this area of pay governance. As a final thought, to avoid the risk that a problematic metric could be imposed by regulation, we would encourage companies to demonstrate that there are simpler and more effective ways to deliver the outcomes that we are looking for, equitable compensation and moderation of executive pay. Thank you for your attention. Thank you, Mr. Mountain, for your comments. Is there any further discussion on these proposals? Seeing none, on ballot B then, please mark your vote on proposals one and two. I will now ask the scrutineers to collect the ballots. If you have an additional ballot to be collected, please raise it for the scrutineers to see. One up the top here. Right up at the top in front of the audio table. There we go. Any other ballots? Thank you. The voting is now closed. While we wait for the results of these votes, we would like to show you a brief video about how RBC makes a difference in the lives of our employees, our clients, and our communities. Following the video, Dave McKay will lead the next part of the meeting when shareholders will have an opportunity to ask additional questions. I wanted to be a heart surgeon when I was probably eight. It's a long journey. I'm still in it. When I got into medical school, I got a line of credit from RBC, and then when I got into residency, as needs change, RBC has been there. We're taught through medical school and through residency that you give your 1,000% to your patients. When I go to a bank like RBC, I see them doing the same thing. Having a special needs daughter makes you look at things differently. The single most important thing in our retirement is when we're gone, that our daughter is taken care of. It was a collective effort by a whole team of individuals and professionals at RBC. We refer to this relationship as a journey, and it's been a great journey. When I came to Canada about eight years ago, I applied for a role in RBC, and I got the job. What I love about RBC is that the bank gives you that opportunity to identify where you can contribute. I have to wake up every day doing what's right. There's just no better place to be. I work with fabulous people. That's one of the things about my job that I really enjoy. You don't just come to work at RBC. You come into RBC to build a career. As long as you are open and willing to define what success means to you, RBC will work with you. For me, volunteering has sort of always been a part of my life. It's something that I can't imagine not having in my life. It makes me proud of RBC as an employee that we support not only organizations in the community but also support employees who give their time. I love that video. 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 to questions or comments. Microphone 7 first and then Mr. McKay, my name is Paul Durnin. I'm from Burlington. Just a big coincidence, the TD was on this very floor one week ago, and I'm not denying the superlatives that are in your book, 14% compounded for 10 years and rising dividends. Nevertheless, I noticed that the TD now has more assets. They have quite a few more employees and more branches in total. A lot of those are in the U.S. And TD has also won customer service awards on a repeated basis for several years. The market capitalization of the TD has caught up to the Royal, and it passed it, I think, last fall for a little bit. It's almost at your level now. Is the TD nipping at your heels, catching caught up, and about to pass? Is my question. I think you still have more retail branches in Canada than TD has, but they have more total branches. Thank you for your question. First and foremost, we do not compete on assets. We certainly compete for customers, and we compete for employees, and we certainly I think all competitors try to drive shareholder value, but competing on assets is not something I think anybody focuses on, including ourselves. When we look at different strategies across the banks, let me comment on our strategy, and you referred to our Canadian marketplace, where we are the undisputed leader in retail banking in Canada. We have number one or number two market share across every single core business we compete in: consumer deposits, consumer lending, business deposits, and business lending. We have gained market share across all those core categories year-over-year. We are growing in Canada. We are increasing the value of our franchise, and we are winning new business. I think we are very proud of our momentum in Canada. We have the largest number of branches in the country, but we do not measure that or compete on that directly. It is about driving customer value, driving shareholder value from that. Whether TD has more branches in total, they pursue a very different strategy in the U.S. than we do, a more branch-centric strategy. I do not think you can really compare apples and oranges there. The last thing I will say, as far as customer satisfaction, we are very proud of our customer satisfaction numbers. They have grown. I am referring to our net promoter score year-over-year has grown eight consecutive years. We have got very strong and satisfied customers, and that is why you see us gaining market share year-over-year in every single category. No other bank can claim success in that area. That is really our view of the retail bank and how we compete. Okay, I have a couple more questions, but I'll go in rotation, let somebody else. Maybe we'll go to microphone 5, and I can come back to you then. Judy Baker, shareholder. I applaud RBC's CAD 100 million to make communities stronger and also to your employees for the amount of money that they raise. I went looking and perhaps in the minutia of your statements, I've missed it. I went to the website. How effective or how do you determine that the 100 million is an effective use in the communities? How do you audit that? And what portion of that 100 million is an administration cost? Thank you for addressing this. That's a great question, and we ask ourselves that question all the time. And maybe I'll ask Sabine, who is in charge of our foundation, maybe to talk a little bit about how we work with the charities and how we make decisions and how we follow up and how we do follow up on the effectiveness of those donations with those charities. Before we give the money, we're always asking, "What are your objectives? What are your goals? How are you going to use the money? What's a successful outcome look like?" And we follow up with them very rigorously in doing that. So it's very important to put that money to the best use. We constantly think about strategically, are we doing the right thing? Are we making a difference? I can assure you there is great rigor around the process before we donate the money and the follow-up afterwards to make sure we are getting money. If we don't feel we are, we'll make a change. It's a very good question. Microphone seven, it looks like again. Okay. Quite a few years ago, I heard City National Bank described as the bank of Hollywood movie stars. Maybe it's grown to something more than that by now. The question I have is RBC Insurance. I have seen RBC travel insurance for sale in travel agents' offices. I know that the law does not allow insurance to be sold in the retail bank. All of the insurance products that you have for sale, I assume, are with independent insurance agents. Is that correct? Or regional RBC Insurance offices? When you're speaking of our property and casualty business, certainly we're not able to sell those products through our branch network. That's not permitted by the Bank Act, but we can distribute them through our own direct sales force. We can distribute them online, where we've had great success, and we can distribute them through other broker networks. But they're not permitted to be sold in our branches. Okay. What do you mean by district? distributed. We can sell them online. Yeah. We've had great success in innovating an online direct-to-customer sales. We can have our own proprietary sales force within the insurance division to do that, and you can distribute through the broker network, but you cannot distribute through the branch network as you referenced. Okay. People are going to a regional RBC office that is just for insurance. Is that right? We have established offices adjacent to our branch network. They're separate offices. They're RBC Insurance offices. We've pursued that strategy probably for the last five years now, where we can have an adjacent, separate RBC Insurance office. That's one of the other strategies we pursued, but we cannot sell that product within our network. Okay. I assume I am talking now about federal government law that does not allow- It is the Bank Act that prohibits it, yes. The Bank Act prohibits that. Okay. It does not in the U.S., and I am quite sure that different banks are selling insurance directly in their branches in the U.S. What about changes to the Bank Act to allow this? Would this boost sales if you had it, if it was to look more like the U.S.? I think for sure it would boost sales. I think our federal government and our Ministry of Finance have made it very clear that they are not prepared to entertain that proposal, and we do not expect that to change anytime in the near future. What's the reason for that? Probably best posed towards your MP or your Ministry of Finance. I think they've looked at the system, and they're happy the way it operates today, and that's the decision the government's made, and we'll innovate and continue to serve our customers in the ways that we can. Thank you very much. Thank you. Oh, sorry. Microphone one. My name is Adrienne McInnes. I'm a shareholder. First of all, I'd like to thank you for having such a great meeting and for being open to listen to shareholders and customers. My question is concerning the aging population and your wealth management. The question I have is, many clients coming into your branches at some point in their life will have someone in their family who becomes disabled or becomes infirmed. As part of your wealth management, I know the RDSP RDSP and the disability tax credit are available. However, they're very confusing products. What I find is when I go into different banks at the branch level, it's very hard to get clear information. Unless you directly ask and pursue it's very hard to get. When you're disabled or when you have someone that's become disabled very quickly, that's really difficult. I just wondered what you're doing about the RDSP, how are your numbers, and do you have a strategy to make that product available to customers? Thank you. Yes. We are very proud that we're one of the early launchers on RDSP, and I believe we are still the market leader in RDSP within Canada. I do acknowledge that it's a product that we do make available across our network, but we have differing levels of expertise in communicating that product and that capability across the country. We do believe it's very important, which is why we were one of the first to launch it in this country, I believe four or five years ago. I'm not aware of any specific plans. I'm going to look at some of my very capable colleagues here. Jennifer, do you have any specific insight on how we're distributing, how we're going to think about changing the communication around the RDSP product? Jennifer Tory is our Group Head of Personal and Commercial Banking in Canada. We should have a microphone here for her somewhere. Right in the front here. Thank you for your question. We are endeavoring, especially as the population ages, to make sure that we continue to upskill our employees around the variety of different products and services that are available to our clients. I would be happy to speak with you afterwards if you would like to specifically and bring one of my colleagues along. I do acknowledge that as the population ages, we will have to do a better job of making sure that our employees know all the various products and services available, and we place much importance on financial literacy and helping our employees to help our clients. Thank you for your question, and I will meet with you afterwards if you wish. Number 4. Yes. Hi. I am Jeffrey Kronsten, shareholder. Thank you for the meeting. I want to commend RBC because I believe you are the first and maybe the only Canadian bank that has an impact investing group. I would like you to tell us a little more how that is going for your bottom line or the triple bottom line, the social, helping people as well. They are very active in impact investing in Europe, especially the U.K., and it heartens me that at least one Canadian bank is in that area, and I would like to know a little more about it, how it is doing for your business, and how it is doing for your customers. Thank you. Yeah, thank you for your question. We are proud of what we do in impact investing, and one of the champions of that has been George Lewis. George, maybe I will ask you to make a few comments and you are closer to it than anyone on the team here. Is there a possibility of killing that light? Can you turn the light down, please? Thank you. Thanks very much, Dave, and Jeffrey, thanks for your question. Thank you for recognizing RBC's leadership in this area. We started what might seem like a relatively modest investment, CAD 10 million, but it is very significant in the Canadian marketplace. It's really an effort from a number of people within RBC in Sabine's area, in our RBC Foundation, which was referenced earlier. It works with people from my area in terms of RBC Global Asset Management, and it's actually just one set of a whole range of investments that we have available for people who are interested in environmental, social, and governance-based investing. It's an area of particular focus for us. We've made a number of modest investments from that fund that are performing well. We will be making more, and I think it's going to be an area to your point, where perhaps other parts of the world are further along, such as the U.K., and we've spoken to that in that market. But I do think it's going to become more of a trend here in Canada, and it's, I think, a very positive trend, one where we expect to make both a financial return from these investments, but also, to your point, a social impact return. Thank you. Microphone 5. I'm Hélène Dufresne from the MÉDAC. In your presentation, you mentioned that you do business in Luxembourg. Could you explain what kind of business you do in Luxembourg? The question is, what is the nature of our business operations in Luxembourg? Our Luxembourg operations are Investor & Treasury Services. So it's our global custody capability that we offer from there in treasury services, and it's targeted really towards investor and mutual fund industries. So we have got significant operations there, back office operations in Luxembourg, serving our global custody and treasury services clients. Your business in Luxembourg, did it enable you to pay less in taxes in Canada? No, our operations in Luxembourg are designed around the operations of serving clients and administrative back office and front office sales teams. That's the focus of those operations. We acquired those with RBC Dexia, and they're part of the merged Investor & Treasury Services business, and that's our primary operations in Luxembourg. The bank agrees that it should pay all its taxes in Canada, right? Microphone seven then one next. Good morning. My name is John Flanagan, and I am a shareholder. I have several questions and a couple of comments. Please bear with me. With the changes in the accounting profession, can you elaborate on whether the bank is using generally accepted accounting principles or the International Financial Reporting Standards? What is the bank's recourse if the auditors have made a mistake using IFRS? I was unaware that City National Bank was recently acquired. I am about to launch a second U.S. corporation, so if someone after could get a hold of me so I can- That would be great. We look forward to helping serve you in the United States, and I will introduce you to Russell Goldsmith, who is our CEO of City National, and he is here with us today. That would be instead of using HSBC or That is part of the synergies that we talked about. It is great to hear. Okay, I appreciate that. With the baby boomers having emerged into retirement and having watched that demographic for the past 25 years myself in some of the businesses that I have started, and knowing what is going to happen because of the lack of financial literacy, which our educational system is deficient, how is RBC going to help Canadians that want to transfer their assets in Canada to the U.S. or other countries? As well, being a big business owner and investor in Canada, specifically here in Ontario, with the recent political changes or rumblings with our provincial government and the Ontario Retirement Pension Plan and the current carbon tax, I see a business occupy protest emerging. Because I myself, if the Ontario Retirement Pension Plan comes into effect and carbon taxes comes into effect, I want some help to get all of my assets out of Ontario and Canada because I want to renounce my Canadian citizenship. Well, you have a few questions. Maybe we'll stop there and we'll answer your questions before I forget them all. Your first question was around accounting principles, I think, and let's address that one. I'm going to ask Janice to do that. Then I'll try to address the question around advice and wealth management. Janice, please. Okay, great. Thank you for your question on accounting. We have been reporting under IFRS, International Financial Reporting Standards, since 2011. We are quite well-versed in the accounting standards, as are our auditors. We have the benefit of having auditors that are global, so they're very well-versed in the different accounting practices. With respect to your question about any differences in treatment of accounting that possibly could arise, we have robust discussions where we're challenged. Of course, we rely on the guidance too of our audit committee, who is there to consider any of the options available and to consider the challenge and our responses back and forth with the auditors. We're very confident that the application of IFRS in our accounts is very sound. And just around specifically our advice to our clients as they go through preparing for retirement and saving for retirement, I can only answer your question generally. Would love to go aside and introduce you to a number of our wealth management advisors, if you haven't met them already, and we can certainly walk through your specific interests. But in general, we do believe, talking of both financial literacy and advice, that we've invested a significant amount of money and effort building out what we believe are proprietary advice capabilities. In my speech, I referenced Your Future by Design. We're very proud of it, and we've trademarked it, and we believe it's a unique and proprietary way to deliver advice that just doesn't focus on asset allocation, but really takes a broader view of what are your goals and what are you trying to achieve, and weaves asset allocation into that at the end. We really believe that far too many financial institutions jump right into asset allocation and don't spend the time to really listen to their clients and understand what they're trying to achieve before they get into the financial planning capability and financial planning exercise. It takes a long time to embed this in an organization and a division of 30,000, 40,000 people. We've spent the last decade working, building tools, improving what we do, and we feel we have outstanding capability to serve the needs of a retiring generation taking this type of approach. We're very proud of our holistic approach. It's working for clients. It's about listening to clients and really understanding them, and that's why we feel we're going to be extremely successful in serving Canadians over the next decade. Would love to sit down with you and introduce you to Jennifer Tory or George Lewis, and we can go through your specific situation offline. Thank you. Do you have one more question? Then I'll move to another. Just one comment. My background is actually engineering. I wanted to be an automotive engineer when I was a teenager. There was a very good friend of mine. She passed away a few years ago in her 90s. She was the one person that converted me into an environmentalist, so I applaud you for the Blue Water Project. Great effort. Thank you. Thank you very much. Microphone one. My name is Wilfred Pierre. I am of Aboriginal heritage. I am also a pensioner of the bank, and I worked for 22 years for the Royal Bank. What I would like to find out from you, Mr. McKay, is are there any programs being implemented that would help the Aboriginal communities across this country and even across the world? My recent inquiries tells me that there is an organization called the Royal Eagles of Ontario. That is right, yeah. Now, I tried to find out who heads this organization. I was told it is someone from Zimbabwe who had no connections whatsoever with the Aboriginal communities of this country. I figure that my colleagues in the Aboriginal communities have been given the short shrift by such an appointment. Also, I know that they could very well do with help from the Blue Water Project and all other funds that are allocated for charitable purposes. That's my question to you. It concerns me deeply that our Aboriginal people, the first inhabitants of this continent, seem to have been left out of the progress of our great bank and organization. I do wish that you would use your influence and power to implement programs that would be of assistance and help to our people and would help to raise their dignity and make them more productive and happy members in societies of Canada. We have a Vice President in charge of Aboriginal banking who's really responsible for ensuring that we tailor our services and our approach to the unique needs of the First Nations communities. Also, over the years, we've had Phil Fontaine, former First Nations chief, as a special advisor to RBC to ensure that we do build the appropriate services and address the needs of a unique community properly. We're very proud of how, whether it's agency banking on a reserve and building links there to our support of a number of initiatives. We do believe we are tailoring but can do more, which is why we listen to the community, we listen to special advisors like Mr. Fontaine, and we do try to tailor our needs. If you'd like to talk to Jennifer afterwards, we will put you in touch with our executive who's responsible nationally for First Nations and Aboriginal banking. We have microphone. Are there any other questions then? Seeing no one at the microphones, then Katie, I will now turn the meeting back to you. Thank you. Thank you, Dave, and thanks to our shareholders and participants who shared their thoughts with us today. I'm now going to call on Joseph Chirico to report on the preliminary voting results, which will also be posted on the screens. Copies of the preliminary voting results will be available at the information desk after the meeting, and final results will be posted on the bank's website. Joe? For the information of shareholders, the scrutineers wish to report that 698,984,101 shares or 48.45% 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 15 nominees named in the proxy circular, with each nominee receiving in excess of 97.23% in favor. The results for the appointment of auditor are 99.3% voted in favor of Deloitte LLP and 0.63% withheld from voting. The results on the shareholder advisory vote on approach to executive compensation, 95.28% voted in favor and 4.72% voted against. The results on the special resolution to implement changes to the variable compensation for certain RBC employees in the U.K. to comply with new regulatory requirements, 98.06% voted in favor and 1.94% voted against. The results for the shareholder proposals are as follows. Proposal number one regarding compensation report, 3.21% voted in favor, 96.25% voted against, and 0.54% abstained. Proposal number two regarding stock options, 5.09% voted in favor, 94.44% voted against, and 0.47% abstained. Thank you. Thank you, Joe. I now declare that the 15 nominees named in the proxy circular have been duly elected as directors. Deloitte LLP has been appointed as the auditor for the 2015 fiscal year. The advisory vote on the bank's approach to executive compensation has been approved. The special resolution to implement changes to variable compensation for certain RBC employees in the U.K. has been approved, and shareholder proposals numbers one and two have been defeated. Ladies and gentlemen, I sincerely want to thank you for your participation today, and I will conclude by once again expressing sincere appreciation to our 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, thank you for all your efforts and your contributions to RBC's success. The meeting is now concluded. Thanks. The meeting is now concluded.