AGM 2013

Feb 28, 2013

Good morning, ladies and gentlemen. I'm David O'Brien, Chairman of the Board of the Royal Bank of Canada. Welcome to our annual and special meeting of common shareholders. I'm very pleased that we're meeting this year in Calgary, in a city and a province that are driving growth for our entire country. RBC has deep community ties, strong partnerships, and a long history of supporting clients here, and we are proud to share in Alberta's success. I'm also pleased to have so many joining us here in the room today, and I know we have many more on the webcast. I now call the meeting to order. Anyone addressing this meeting may do so in English or French. If you would like a translation headset, please advise us by raising your hand and an attendant will assist you. You will find English on channel 1 and French on channel 2. The meeting will begin with a report from Gord Nixon, our President and CEO, followed by the regular items of business, including the election of directors and the appointment of the auditor. Shareholders will be asked to approve a non-binding advisory resolution on our approach to executive compensation, as disclosed in the proxy circular. We will then consider the shareholder proposals and deal with any other business, including questions from shareholders. I draw your attention to 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 invite and welcome questions and comments from shareholders. Some guidelines are set out in the agenda included in the package that you received as you came into the meeting. Please keep your comments brief, and in fairness to all shareholders, we ask that presenters limit their remarks to less than 3 minutes. At the appropriate time, if you would like to ask a question, please proceed to a microphone and give your name. Then tell us whether you are a shareholder or proxy holder. I'd like to begin by introducing the others who are here with me on the podium. From your left to right, we have Janice Fukakusa, Chief Administrative Officer and Chief Financial Officer. Gord Nixon, Chief Executive Officer, and Carol McNamara, Vice President, Associate General Counsel and Secretary. I will act as Chairman of the meeting, and Carol will be Secretary. Joe Chirico and Mark Thompson, officers of our transfer agent, Computershare Trust Company of Canada, will be our scrutineers. Also present are the members of our board and senior management team. At this time, I would also like to introduce the representatives of our auditor. From Deloitte, we have Allan MacGibbon, Richard Nunn, and Michael Lloyd joining us today. As a quorum is present, I declare that the meeting is properly constituted. I will now call on Gord Nixon to address the meeting. Gord. Thank you, David, and good morning, ladies and gentlemen. On behalf of the members of our team here in Alberta and our 80,000 employees around the world, welcome to RBC's annual general meeting. It is a pleasure to be here in Calgary, a vibrant and economically dynamic city and a province known for its beauty, its resources, and entrepreneurial spirit. RBC's history in Alberta goes back over 100 years to when we opened our first branch in Edmonton in 1906. Today, we employ more than 4,100 people in the province, have 137 branches, and are privileged to serve more than one in three Albertans. We have an exceptional team here that has made this possible. I would like to recognize some of my colleagues here from Calgary. Bruce MacKenzie is our Royal Bank's regional president for Alberta and the territories. Derek Neldner is here, our managing director of RBC Capital Markets and co-head of our global energy team. We have two vice chairmen from Capital Markets, Bill Sembo and Gord Ritchie. I would also like to acknowledge our Calgary-based directors, our chairman, of course, David O'Brien, as well as Rick George and Tim Hearn. Over the years, our executives, current and past, and directors from Alberta have played a big role in our success. I would be remiss not to mention Ted Newell and Peter Lougheed, both long-term serving directors whose sage advice, support, and loyalty will always be part of the RBC legacy. Our bank has been honored to play a role in Alberta's growth. This province, and particularly its energy sector, have been vital to Canada's economic success. We are proud to be a global leader in the provision of financial services to the energy sector, and that leadership has been built from our base right here in Calgary. Alberta is much more than just energy. Many sectors are contributing to its growth, including agriculture, technology, manufacturing, healthcare to name a few. We are privileged to serve over 110,000 small and medium-sized businesses throughout the province. Before I go through our results, I would like to emphasize that Canada's strength and diversity has given RBC a strong foundation for growth. Like Canada, RBC possesses a reputation for strength and stability and sound risk management. Like Canada, we draw on the strength of our diversity. We value good governance, and we strive to create an environment where talented and skilled people can reach their full potential. Being the leading bank in a country with a sound banking system has provided significant competitive advantage. In short, we have the good fortune of being positioned to both benefit from and contribute to the growing strength of our country. How does RBC ensure that we live up to our potential? I believe that the critical starting point is having a consistent vision. Our vision is always earning the right to be our clients' first choice. We are in a client service business, and RBC has always recognized that long-term success will only come from providing value and advice to our customers. RBC's strong foundation means we are well-positioned to execute our strategy and drive growth for our clients and for our shareholders. While the market environment has forced many of our competitors to restructure and to change direction, our long-term strategic goals remain consistent. Because we refrained from many of the excesses of our global competitors leading up to the economic crisis of 2008, we are one of the few global banks whose business mix and strategic focus has remained constant. In Canada, our goal is to be the undisputed leader in financial services. Globally, we strive to be a leading provider of capital markets and wealth management solutions. In targeted markets, we aim to be a leading provider of select financial services complementary to our core strengths. In Canada, we have established a leadership position and continue to profitably extend this lead. Our objective is to grow our Canadian banking business at a 25% premium to the competition, and we have consistently exceeded that over the last number of years. Outside of Canada, we operate in areas where we have competitive strengths and can leverage our leading Canadian franchise to grow profitably. Our focus is on high net worth, corporate, and institutional clients in the U.S., the U.K., Europe, and through emerging market hubs such as Singapore and Hong Kong. Our brand strength underpins our growth strategy. Not only is the RBC brand as strong as it has ever been in this country, but internationally, our brand has become known for integrity, strength, and stability. Turning to our financial performance, it is clear that our vision, strategy, and commitment to customers has served us well. Our earnings in 2012 were not only a record for RBC, but they were the largest ever for a Canadian corporation. We had record results in three of our business segments: personal and commercial banking, capital markets, and insurance. We delivered earnings of over CAD 7.5 billion, up 17% from the previous year. On a continuing operations basis, our earnings of CAD 7.6 billion were up 9%. These results are a testament to our diversified business model and our ability to execute our long-term growth strategy while maintaining a prudent risk profile and disciplined cost management. Last year, our return on equity was 19.5%, notwithstanding our high capital ratios that were well above regulatory minimums. Over the past year, we have gained market share across most of our businesses. We have deepened customer relationships. We have added new clients and invested in building a strong franchise, both in Canada and globally. We have been actively managing costs relative to revenue growth to improve efficiencies. This means we can reinvest savings in our businesses. We also continue to focus on effective deployment of capital, including balancing investing in our businesses with returning capital to our shareholders. We raised our dividend twice during 2012 for a total increase of 11%. We made strategic acquisitions, including buying out our joint venture partner in our global custody business and the acquisition of Ally Canada. We put in place a share buyback program for 2013. Thanks to our earning power across businesses and geographies, we achieved our financial performance objectives for the year. Earnings per share growth, return on equity, capital, and dividend payout ratios. Our one-year total shareholder return during fiscal 2012 was 22%, the highest of the major Canadian banks. Having said that, our objective is to achieve top quartile shareholder returns over the medium term, as we believe this reflects a longer-term view of strong and consistent financial performance. For the five-year period, we delivered top quartile returns compared to our peer group. We are off to a good start in 2013. This morning, we released our results for the first quarter, and we earned over CAD 2 billion, up 12% from last year and 8% from last quarter. Diluted earnings per share of CAD 1.36 were up 11% from a year ago, and our return on equity was 19.6%. Our Basel III Common Equity Tier 1 ratio of 9.3% is well ahead of both internal and regulatory requirements, and we continue to aggressively manage our balance sheet. I'm also pleased to tell you that we are further raising our quarterly dividend by announcing this morning an increase of CAD 0.03 or 5%. This is the fourth increase of our dividend in 2 years, representing a total increase of 26% since the first quarter of 2011. All of our businesses contributed to our strong results this quarter, with record earnings in personal and commercial banking and wealth management, and strong earnings in capital markets. We believe our financial and competitive strength positions us well to deliver continued growth and to achieve our 2013 objectives. I would now like to provide you with a brief, high-level overview of each of our businesses and tell you why we believe they are positioned for future success. Starting with personal and commercial banking, our largest business. We have the largest and most profitable retail bank in Canada, and we hold a number 1 or a number 2 position in each of our core products. We are continuing to extend our lead by winning more market share and growing earnings faster than our peers. We have the largest distribution network, the broadest range of products and services, and the size and scale to drive efficiency. We continue to focus on innovation and technology as a key to winning business. While our Caribbean banking operations are facing weak economic conditions, this continues to remain an attractive region for RBC. We've been working hard and doing a lot to improve our operations and our efficiency, and are confident in the future operating performance of this business. Our U.S.-based internet bank is serving a growing number of clients and provides a leading cross-border product offering for Canadian customers who want effective, low-cost banking and credit products in the United States. Our wealth management division is a leading global wealth and asset manager. In Canada, we're the clear market leader with the largest full-service wealth manager, asset manager, and mutual fund provider in the country, and we are gaining market share. Internationally, we're building a high-performing global asset management business. We're expanding our high and ultra-high net worth market share and leveraging our capabilities, again, to win more business. Where global competitors face capital challenges, we're stepping in to serve their clients and hire the best talent. While the operating environment of wealth management has been challenged by low interest rates and anemic markets over the past few years, we're confident that our foundation will provide strong future growth, particularly as markets stabilize, client activity increases, and interest rates normalize. Our insurance business is one of the largest Canadian bank-owned insurance companies. Its strength is fueled by the RBC brand, a broad product suite, and leading distribution capabilities. We are winning business by making it easier and more convenient for clients to do business with us. Investor and Treasury Services is a new segment within RBC that combines RBC Investor Services, a leading global custodian, with our global financial institutions and treasury services businesses. Bringing these activities together positions us to deliver a more integrated suite of products to our institutional clients in Canada and around the world, to expand revenues, and to improve efficiency. Capital Markets is a top 10 global investment bank, and we are gaining market share in traditional investment banking businesses faster than any bank in the world. In Canada, we've successfully extended our lead, and we have significantly increased market share in the U.S., which is now our largest market. In the U.K. and Europe and Asia, we're winning business that was once the domain of the bulge bracket dealers. Over the last several years, we shifted our revenue balance from trading to lending and traditional investment banking activities. We have moved aggressively to reduce risk and eliminate complex assets from our balance sheet. We have built top teams and made a name for ourselves in advice, execution, and balance sheet support for our clients. While others are withdrawing credit in the U.S., we have capacity because we significantly reduced our loan book going into the crisis as we viewed the risk-reward balance as too low, counter to virtually all of our global competitors. Across our businesses, RBC is well positioned to continue to win clients and market share. But as fortunate as we have been in Canada to date, we live in an era of global economic and market uncertainty. The headwinds in the operating environment are not new, but they will continue to shape our outlook. The European sovereign debt and banking crisis continues to create uncertainty. While we have seen increased stability in Europe, the structural imbalances remain and ultimately have to be managed and many of their economies restructured. Fiscal and regulatory uncertainty continues in the U.S., potentially creating a major risk not just to the U.S., but to the world. The consequences of America failing to effectively deal with its fiscal imbalance will be significant. As we see daily, the political dysfunctionality is preventing reasonable compromise. Domestically, we are not without our challenges. We have rising provincial debt levels, low relative productivity, and concern over the state of the Canadian housing market. Concern, in my view, that's been overstated by some, but nonetheless, has resulted in slowing consumer demand. Our industry continues to face considerable regulatory uncertainty. While Canada's principle-based approach to regulation is a source of strength for this country, other jurisdictions are looking at more prescriptive approaches and more protectionist measures. We need to ensure that we hold firm to our approach and promote quality of regulation over quantity. The fundamental dynamics of the global economy are changing. Emerging market economies are providing the bulk of global growth, while at the same time intensifying global competition. Technology and the internet are not only changing the way that we do business, but they are reshaping industries, including financial services. How does Canada adapt to this new global environment? How do we at RBC both protect ourselves from unpredictable events while taking advantage of the opportunities presented? Two years ago, I said that this would be Canada's decade, and I still believe in our ability to outperform the rest of the developed world. But we must continue to transform our economy and create sustainable jobs. Canadian businesses need to aggressively pursue new export markets. When it comes to going global, our businesses are falling behind other industrialized nations. Our trade patterns have barely changed since Confederation, and if we are to achieve above average growth, we must increase overall export activity with the parts of the world that are actually growing. This is not just about the resource sector. We must expand trade with a strategic approach to other industry sectors such as agri-foods, advanced manufacturing, healthcare, and technology, areas where we can compete and take advantage of the growing middle class in emerging economies. We also need to close the productivity gap and invest in innovation and entrepreneurship. Canadian companies must rev up their commitment and find better ways to translate research and ideas into viable commercial successes. Immigration policies also are critical to our future prosperity. We continue to need more immigrants to Canada, but it's not just about the numbers. Immigrants need to be effectively integrated in our society, and we must assist them in finding meaningful work that is consistent with their education, experience, and abilities. Done right, this drives economic growth, and it is one of Canada's most obvious competitive advantages. All this requires smart, efficient governments that encourage and facilitate the growth of emerging sectors and export activities. If we let process inefficiency, bureaucracy, and trade barriers get in the way, we will fall further behind. Now, it's easy to stand here and to identify weaknesses. We all know that finding solutions is more challenging, but we must start putting in place the policies to deal with these challenges, or we will lose the benefit of the relative strength that we have built up over the last five years. If I worry about one thing in our country, it is complacency. On a relative basis, we have done incredibly well, so why change? But in today's world, the status quo is simply not an option. One can view the glass half full or half empty, and I certainly choose the former, as we are in a position to tackle these issues, a luxury that many countries and many developed economies simply do not have. Canada has the fundamental strength to create jobs and prosperity, but we need to work differently and together to achieve our potential. At RBC, we must also continue to transform in order to capture business from higher growth markets and find better ways to more efficiently serve our clients. Today, we continue to invest in technology and in people. We have record spending on technology and innovation to improve efficiency and continue to attract diverse talent to better serve our clients. We entered 2013 with great momentum in all of our business platforms, high capital levels, and strong earnings. So we have the ability to withstand headwinds and to invest in each of our businesses. Before closing, I would like to briefly comment on corporate citizenship at RBC. Today, stakeholders expect much more from corporations, and society's expectations are only going to increase in the future. There is no question that the most important role of a global financial institution like ours is capital formation, helping individuals and businesses grow and prosper. But we also pay taxes. We purchase goods and services. We contribute approximately CAD 100 million a year in charitable donations and community sponsorships. We know that it is possible to make healthy profits and support social and environmental progress at the same time. The definition of corporate social responsibility is changing, and companies that do not live up to societal expectations will pay a heavy price. We actively care about our communities, and we work hard to balance business and social interests because we believe that the right balance is critical to creating sustainable long-term value. Some highlights of our activities include the RBC Blue Water Project, a CAD 50 million commitment to help protect the world's most valuable natural resource. The RBC Children's Mental Health Project has provided more than CAD 16 million to help children and youth with mental illness. Last year, we launched a social finance initiative, which will provide CAD 10 million in capital to help finance small businesses that tackle social and environmental challenges and an additional CAD 10 million to be invested in socially responsible funds. Through RBC Play Hockey, we support hockey at the grassroots level so more young Canadians have the opportunity to play. We are honored to have three RBC Olympians with us today, current and past players from our women's national team, Jennifer Botterill, as well as Calgary's own Bobbi Jo Slusar and Carla MacLeod. On the way out today, please visit our Play Hockey display, where you can get autographs and visit with these three remarkable women, but also hear about our program. I am also pleased to announce today our latest donation of CAD 250,000 to the Calgary Police Foundation in support of the new Child Advocacy Center, which will assist children and their families facing issues of abuse. It is not just about giving. It is also about improving communities where we live and work, and ensuring that we have the right policies, the right culture to do the right thing for all of our stakeholders. I am particularly proud of the many hours of volunteer work and contributions made by RBC employees in support of a wide range of important causes. Corporate social responsibility is a complex equation. It is not easy. But we work hard to find the right balance, and we are pleased to, once again this year, be included in the Global 100, a list of the world's most sustainable companies. Finally, confidence in the future of RBC is founded in the strength of our people. For almost a century and a half, our employees have been earning the right to be our clients' first choice by delivering trusted advice and helping them achieve their financial goals. There is always room for improvement, we know that, but RBC does stand out for the talent and dedication of our people. Our 80,000 employees in over 50 countries share a client-focused vision and live our core values of service, teamwork, responsibility, diversity, and integrity. These values unite our diverse workforce as we work together to understand and meet the needs of our clients and deliver value to our shareholders. While 2013 will no doubt bring its share of industry and economic challenges, I am extremely optimistic and excited about RBC's future. Our businesses are well-positioned, and each has ambitious but sound objectives and strategies. On behalf of our board of directors and my colleagues on our group executive team, I would like to thank our employees for their continued hard work and commitment. I believe RBC has the right strategy, culture, and people to deliver growth and build value for our clients, for our employees, for our communities, and for our shareholders. Thank you very much, and I will now turn the meeting back to David O'Brien. Thank you, Gord. Reports of the committees of the board can be found in the proxy circular. Copies of the auditor's report and the financial statements have been mailed to shareholders and are also available at the information desk. Shareholders now have the opportunity to ask questions on the financial statements. If your question relates to other matters, 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. Please tell us your name and whether you are a shareholder or proxy holder. I take it there are no questions on the financial statements. We will now proceed with the business of the meeting. You have received a notice of the meeting and proxy circular, which specify the matters to be considered at this meeting. I will now ask Carol McNamara to review the voting procedures. Carol. Good morning. Today, we will be voting by ballot, except as otherwise specified by the Chairman. Registered shareholders who have not sent in proxies and proxy holders who are present have received ballots at the registration desk. Please print your name clearly and sign each ballot. Votes will be tabulated by the scrutineers, and the results will be announced later this morning and posted on our website. Only registered shareholders or their proxy holders are entitled to propose or second motions. A simple majority of the votes cast, by proxy or in person, is required to approve matters voted on at this meeting, except for shareholder proposal number 9, which will be voted on by special resolution and requires approval by at least two-thirds of the votes cast. Thank you, Carol. Our transfer agent advises that over 757 million votes have been received in respect of matters that are before the meeting, and this represents 52.4% of total outstanding shares. To facilitate proceedings, and given that our employees represent a significant portion of our shareholder base, we have asked some of our 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. The number of directors to be elected has been fixed by the board at 17. One of the nominees is standing for election for the first time. David Denison joined our board last August, bringing valuable experience in the financial services industry. Most recently, David served for seven years as President and Chief Executive Officer of the Canada Pension Plan Investment Board, leading it through a significant transformation and more than doubling its assets. Prior to that, David spent 10 years with Fidelity Investments, rising to the position of President of Fidelity's Canadian operation. His extensive experience in financial services includes various senior positions in investment and asset management businesses in Canada and internationally. David also spent two years as Chair of the Canadian Coalition for Good Governance, where he played a key role in advocating better corporate governance on behalf of investors, and we welcome him. Biographies of each of the nominees begin on page five of the circular. I would now ask Carol to read the names of those proposed for election as directors, and I would ask them to stand and remain standing as their names are called. Mr. Chairman, the following individuals are proposed for election as directors: Jeff Beattie, David Denison, Paule Gauthier, Rick George, Tim Hearn, Alice Laberge, Jacques Lamarre, Brandt Louie, Michael McCain, Heather Munroe-Blum, Gord Nixon, David O'Brien, J. Pedro Reinhard, Ed Sonshine, Katie Taylor, Bridget van Kralingen, and Vic Young. Thank you. I will now ask Brian Hesfold and Tracy Long to nominate the directors. Thank you, Chairman. My name is Brian Hesfold. I have worked for RBC for almost 30 years and currently manage our Aboriginal Markets. 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. Mr. Chairman, my name is Tracy Long. I have been with RBC for 20 years and am currently the Manager of the Hillhurst branch here in Calgary. I second the nominations. Thank you. The nominations have been made and seconded. Are there any other nominations? I will now ask Pam Shaw and Amir Khaled to make a motion to close the nominations. Mr. Chairman, my name is Pam Shaw, and I have been with RBC for 30 years, and I am currently the Manager of Calgary Main branch. 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. Mr. Chairman, my name is Amir Khaled. I work with RBC for 13 years and currently manager of McKnight Village branch here in Calgary. I second the motion. Thank you. The motion has been made and seconded. Any discussion? We will 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 after the motion to appoint the auditor. At that time, the scrutineers will collect the ballot for both the election of directors and the appointment of the auditor. If you need a ballot, raise your hand so that it can be distributed to you. Looks like everyone voted in advance. Is there anyone who has not had the opportunity to have their vote submitted? The next item on the agenda is the appointment of the auditor. I will now ask Darren Henry and Hanan Rafi to make a motion for the appointment of the auditor. Mr. Chairman, my name is Darren Henry, and I have worked with RBC for 11 years. I am currently a regional sales coach for Alberta and Territories. I move that Deloitte LLP be appointed auditor of the bank until the close of next annual meeting of common shareholders. Mr. Chairman, my name is Hanan Rafi. I have worked with RBC for six years. I am currently the manager of Rideau Park branch here in Calgary. I second the motion. Thank you. The motion has been moved and seconded. Any discussion? We will now proceed with the vote. On ballot A, please mark your vote on the appointment of the auditor. Once you have done that, I would ask the scrutineers to collect ballot A. Please indicate that your ballot is complete by holding up your hand, and the scrutineers will collect. Is there anyone more that has not had a chance to submit their ballot? The voting is now closed for the election of directors and 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 have in place a policy to hold an advisory vote on our compensation approach at each annual meeting. We hope 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. As this is an advisory vote, the results will not be binding on the board. However, in considering our approach to compensation in the future, the board will take into account the results of the vote together with other feedback received from shareholders. I would now ask Judith Ravensbergen and Tazmoon Ratanshi to make a motion to approve this resolution. Mr. Chairman, my name is Judith Ravensbergen. I have worked with RBC for 25 years, and I am currently a private banker with wealth management here in Calgary. I move on an advisory basis and not to diminish the role and responsibility 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. Thank you. Mr. Chairman, my name is Tazmoon Ratanshi, and I have worked with RBC for 14 years, and I am currently sales manager for Calgary Small Business. I second the motion. The motion has been moved and seconded. Any discussion? Yes, Mr. Chairman. My name is Daniel Thouin. I am vice president of the movement advocating for shareholders, and we have been working with the financial institutions, especially banks, in order to improve the system and to restore confidence in the banking system. Today, once again, I would like to talk about the compensation of executive officers. Unfortunately, you are the first bank to hear me because you are the first AGM. Unfortunately, you are the first. For people here in Calgary, if you are looking for snow, come to Quebec because we have quite a bit of snow. I was very sad to see that you do not have snow here in Calgary, or not much. Last year, you will remember I spoke and I said that we wanted to give you a reminder. We said that 99% of the population told you that you needed to make changes, and perhaps Occupy Wall Street and Occupy Bay Street, perhaps they influenced your decision last year. Shareholders voted. 15.07%, they were against your compensation policy. If we look at the result of the global vote, 50% to 55% this year, there are 52% of people voted. You can see that the bank's salaries would have been endangered by 30% of your shareholders if everyone had voted. Last year, Occupy Wall Street was what endangered you a bit, and now this year it is something else or someone else that is endangering you, and it is an example that comes from far away, from the Governor of the Bank of Canada. In 2012 and on February 26, Mr. Mark Carney criticized once again bank officers for depending on the state, among other things. Their dependency can be seen because your borrowing costs are very low. A good measure of what you borrow is guaranteed by the government. He mentioned something else as well, that the current system privatizes earnings and socializes losses. We saw, for example, the banking system that was saved a few years ago by the government, less so in Canada because our system was in a privileged position, but so far nothing has really changed in the way banks operate. Mr. Carney, in the same article in November 2012, said that banks, out of all the money made in 2012, a minimum of 20% of the profit comes from direct or indirect government support. Second element in us continuing to challenge the compensation given to executives on February 26th, just a couple of days ago, Mr. Carney, once again, during a conference, said what follows. To restore confidence in the banking sector, it is up to the banks and also other stakeholders such as governments. To date, worldwide, there are very few cases. There are almost no cases of bankers who recognize their responsibility in what happened in 2008. That banking system has created a lot of pressure. Over the past five years, we have more pensioners. As a pensioner and a small saver, I have not been able to make up the money lost. The compensation style leads to too many risks, and we could end up with another crisis if nothing changes. I would like to mention an important article that was seen on February 4th in The Globe and Mail, and the article congratulates the RBC for its position because it accepted a study, a vertical and horizontal analysis of compensation for executive officers, and it is working with the three other banks to look at what will be decided by the analysis that was proposed by ethical funds advocates. We're confident that changes could be made, and we hope that where compensation is concerned, that there will be changes made. For right now, we continue to say that we are against your current policy. Thank you very much, Mr. Chair. Thank you very much for your comments. The Canadian banking system and Canadian banks have been the example around the world of a great banking system and very successful banks, and we're proud not only of the Royal Bank but the entire system. We'll now proceed with the vote. Oh, sorry. Yeah. Andrew Pollack. I am a beneficial shareholder of 20 shares, though not a proxy holder. Normally, you would want to be a proxy holder as well to speak. Well, in particular. But I am a shareholder. Oh, you are a shareholder. That is fine. I'm a shareholder beneficially but not a proxy holder. You're a beneficial shareholder. Go ahead. Okay. Yeah. Not too long, though. No, I know. Meetings are pretty short. I'm not aware of the Canadian banks being blamed for the economic crisis. I am aware that RBC had over CAD 7 billion of profit last year. I'm not going to complain about the fact, as a very small shareholder, nor would I complain about it were I a much larger one, that your executives are well-paid. I work as a security guard. I can't afford to buy large positions in companies because I don't earn very much money, but then that's the kind of work I do. That's the kind of skill I have. Gord Nixon has a different set of skills, and if he earns a greater amount of remuneration, the reason I'm not complaining about it is, well, you did get over CAD 7 billion of profit, and you did not cause the economic crisis. I think your executives are well worth what they're paid. Thank you very much. People are probably aware, but the Royal Bank's profit last year was the highest in Canadian history of any corporation. This bank is doing very well. As Gord pointed out in his opening remarks, we had a strong first quarter, which improved on the first quarter of last year, so it augurs well. We'll now proceed with the vote. On ballot B, please mark your vote on your approach to executive compensation. I'd ask the scrutineers to collect the ballots. Everyone had a chance to submit their ballots? The voting is now closed on this motion. Next on the agenda are the shareholder proposals. As we indicated on page 81 of the circular, NEI Investments withdrew a shareholder proposal that it co-filed with William Davis. NEI is represented here today by Michelle de Cordova, who will now briefly comment on the issues raised in the proposal. Ms. de Cordova, welcome. Thank you, Mr. Chair. My name is Michelle de Cordova. I am the Director of Corporate Engagement and Public Policy at NEI Investments. I would like to thank the Chair for giving me an opportunity to speak on a withdrawn proposal that was co-filed by NEI, which holds 387,700 shares in RBC, and William Davis, a private shareholder who has raised pay issues at RBC previously. To very briefly outline our proposal, we had filed a proposal at the five biggest Canadian banks asking the board to report to shareholders on the results and risks of basing the quantum of senior executive compensation largely on horizontal comparisons with peer companies and to discuss the potential to integrate vertical comparison metrics, such as comparisons with the compensation of average workers. All the proposals that we have filed have actually now been withdrawn in the light of commitments by all five of the banks to consider the issues raised in the proposal. Just briefly to explain why we had filed this proposal. What we are looking for in executive compensation is a quantum of pay that is not excessive and that encourages and rewards strong performance in generating long-term sustainable value for shareholders and for other key company stakeholders. We do feel that we are seeing progress on pay for sustainable performance, but we are concerned that current practice on setting quantum, which seems largely based on comparison with the pay of senior executives at other companies, can drive up the quantum of pay each time a company decides to compensate above the median. In this context, we are going to be looking with interest at how RBC's compensation decisions this year are going to affect the decision-making at some of the other banks, too. Our exploration of current research on compensation questions raised concerns that the current practice might not be in the interests of shareholders and the company, and that it could also have negative impacts on society as a whole. Just very briefly, some of those concerns. At the company level, we have been asking ourselves, is a high quantum of pay what really motivates our executives of talent, integrity, and commitment to the success of the company? How much movement is there really by the CEOs and senior executives of the major banks to competitors, and how much is that really driven by pay differences between the banks? We are also concerned about what the consequences might be of a very high quantum of senior executive pay for motivation and engagement and a sense of responsibility towards the company among employees at lower levels. Those are the kind of company-level concerns. We have some wider concerns that have been driven by the discussions about the risks of income inequality that have been now so widely discussed in very mainstream fora such as the World Economic Forum, Conference Board of Canada, even The Economist magazine. There is a concern about the hollowing out of middle incomes, the incomes of the people who really drive economic prosperity and social wellbeing. I think that is a social responsibility question, but it is also a particular concern for financial services companies because these are our clients and customers. We're concerned that if top executive pay maintains an upward trend while the incomes of other workers stagnate, that this will be a driver of income inequality in the economy. We recognize that's only one possible driver of income inequality, but it is one that shareholders have some kind of influence over. We'd like to see a wider conversation about this issue in Canada, and we think it would be great if some of Canada's biggest and most influential companies, like RBC, could take a lead in that discussion. We think it's particularly appropriate for the banks to be involved there, given that they are specially regulated in recognition of the role that they play in society and in our economy. To conclude, as just outlined, we have a lot of concerns and questions. We're not sure yet what the answers are, which is why we filed a proposal asking the bank to explore issues rather than asking for a specific change at this time. We do believe this is an issue of growing interest to shareholders. We note that, in fact, the new Canadian Coalition for Good Governance executive compensation guidelines call into question an excessive emphasis on horizontal comparison in setting compensation. We're not calling for an end to horizontal comparison. We're just asking for an exploration of whether there are other factors that should be taken into account. We'd like to thank RBC for a very good engagement with us on this topic and for agreeing to put these issues onto their compensation research agenda. We very much look forward to the results of that research and of RBC's deliberations on this question. Thank you very much, Mr. Chair. Thank you for your comments. As you indicated, and as indicated in the proxy circular, RBC will be examining these issues. We'll now move on to the five shareholder proposals submitted by Mouvement d'éducation et de défense des actionnaires, which is represented here today by Daniel Thouin. 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 starting on page 74. Mr. Thouin, I'll give you 10 minutes in total to speak to the merits of all your proposals. I would ask shareholders to vote on these proposals by marking ballot C as they are presented. We'll collect the ballot following the discussion of these proposals. I will now give the floor to MÉDAC to present the proposals. Mr. Thouin, you have 10 minutes, and you do not need to read the proposals again. Thank you. Microphone, please. Okay. They will bring translation. There are translators available, and one will be brought to you. Mr. Dwayne, can we wait for a few minutes, please? Are the translations transmitting well? You can see how everyone should be in your remarks, Mr. Thouin. I think we're ready. I'll be very brief, Mr. Chair. I'm sorry for the inconvenience, but my command of English isn't good enough to express what I have to say in such an official setting. On retirement measures, our first proposal has a goal. The new accounting standards that are applied to listed companies and banks respond differently to the standard. These standards mean that pension plans, as of last year and this year more, they must show specific information, and we saw that during an AGM held in Montreal, and we'll see it during other AGMs. The situation is as follows. The explanation for pension plans for your bank and for others, we see the explanation in a huge note that's part of your financial statements called other liabilities. It's a global note, and it represents CAD 165 billion. It's impossible to follow everything. We would specifically like to see the board of directors or the AGM mention what the actual status is of the bank's pension plans, and we like to see it for all listed companies. We see it on page 166, 167, 168. It is note 18, and you can see that the pension plans for their employees has a deficit of more than CAD 2 billion. So 19% of your commitments as a pension plan. That's substantial, and the deficit is growing over the years, and we can see it in other financial institutions in Canada as well. As a small pensioner and a small shareholder, I think that's very worrisome to see that our own banks are not able to have balanced pension plans and to see that they continue to run deficits. We have to understand it's not a reproach. I'm not criticizing the Royal Bank only, but everyone because right now our pension plans are at 2%, 3%, 4%. Others have a much higher profit. So I would like to have specific information on your pension plan, and we're going to be asking that of other banks because right now, all of that information is part of global information. We would like to see it apart. Thank you very much. Yes and no. The next proposal. Did you want to vote on it? No, we'll be voting after all five proposals. Go ahead, and afterwards, there will be a vote. In the same vein, the second proposal is on equitable treatment under the pension plans. Over the years, once again, we've seen that pension plans are a form of Senior executive compensation. However, this approach means that significant privileges are being given to these executive officers compared to other bank employees. What we are requesting in our proposal is that all employees of the bank receive the same treatment under the pension plan. So the same age and contribution capacity, and so not based on the compensation of executive officers in their cases. We want to see more equitable treatment. As you know, today's executive officers are very well compensated. They don't need their own pension plan for their retirement age. The third proposal is related to gender equality in executive positions. As you know, today in Canada, and especially in banks and in financial institutions, women are underrepresented. If you don't have specific measures to increase the number of women, it will never happen. In fact, if we look at the European community, they already have legislation in this area. Our proposal is for our bank institutions in Europe are at 40/40 and 20 free, and we do not have that in Canada, less so in the banks. We would like to propose that you adopt a policy or a goal to increase the presence of women in executive positions, equal to their importance in society, up to 50%. The fourth proposal comes back every year, and it is called the equity ratio. As was explained earlier by Ms. Jenni, a study will be carried out on how to come up with more equitable compensation for executive officers, and one of the ways is to look at the equity ratio between their salaries and other employees. We have a proposal. We would like to see that CEO compensation not exceed 30 times the average salary of non-management employees of the bank. I would like to mention one example from the Governor of the Bank of Canada. His salary is between CAD 430,000 and CAD 507,000. That is the Governor's salary. If you benchmarked it, probably our bankers would have seen their salaries drop. He is leaving. Mr. Carney is going to England to the oldest and probably most powerful bank in the world, and his salary is going to be greater than his salary in Canada, but it is a far cry from the salaries that we see for executives in banks. For the Bank of England, the most prestigious and powerful bank, he will have a salary of GBP 1,300,000, and that will include his housing, and that is equal to about CAD 700,000. Mr. Carney is going to Bank of England, not for the salary. He is going because it represents a challenge for the prestige, and he is going to complete the job he had begun reforming the global banking system. Once again, MÉDAC would like to propose that we establish that equity ratio and that we look at the ratio of CEO compensation to the average salary of non-management employees to make sure that it does not exceed their salaries by more than 30 times. Our final proposal is quite simple and not expensive in the least. At the end of each annual general meeting, or rather a few weeks or months later on your website or by another means, we would like to see a summary of the discussions held during the annual general meetings. We could see minutes, or it could just be one or two pages long, a summary of what happened during an annual general meeting. That way, shareholders who are not able to see it on the web because it happens in the morning, I do not know very many people who are going to decide to watch a bank AGM rather than a hockey game. I think if you had a summary for them, it would be a great service, and I think it would improve democracy for shareholders. Thank you very much. Thank you. Are there any further observations on these proposals? Yes, sir. Je m'appelle Andrew Collins. My name is Andrew Collins. I own 20 shares, and I do not share the same point of view as Mr. Thouin. I'm going to try to explain this in French. No. No, you don't have to. If somebody makes a proposal in French, you can answer in English. That's not a problem. But we have the right to speak French here, so I'm going to attempt it. Mr. Thouin has made two proposals that I do not agree with. We're talking specifically about the proposal that says that we have to have 50% of women amongst executive officers. I believe that the percentage of men and women is not really the most important thing. What's way more important is diversity. Diversity will come naturally if we do not impose obstacles for people, whichever race they are, whether they're men or women. I believe that we need to have competition, barrier-free competitions, which would be open to various genders, races, ethnic groups. What we need is to make sure that everyone working at the bank has a similar chance of being successful. There's another aspect. We're talking about compensation. If we want to have a compensation for the chairman of the board, who would be 30 times the average of a bank employee's salary, well, that might not allow us to find the best candidates because what we are looking for are the best candidates for Mr. Nixon's job, for example. If we want to have more than $7 billion profits at the bank, what we need is competent people like Mr. Nixon. To attract people like Mr. Nixon, we have to pay more than the salary suggested by Mr. Thouin. Thank you. Thank you for your comments. As I mentioned earlier, the bank's responses to each of these propositions is found in the proxy circular, and if you wish to, you can read them. Are there any other comments on this? If not, we'll move to mark ballot C. Please mark your vote on proposals one to five. You still have a ballot that you want to pick up, please raise your hand with the ballot in it. Okay. The voting is now closed on proposals one to five. The remaining proposals were submitted by Lowell Weir, who I understand is not present at the meeting. He advised us that he was ill and was not attending. These proposals are listed on ballot D. Proposal number 9 will be voted on by special resolution and must be approved by at least two-thirds of the votes cast. Shareholders have had a chance to review the proposals and the board's responses and voting recommendations, which start on page 77 of the proxy circular. Before proceeding to mark ballot D, does anyone want to make any further comment in addition to what is already in the proxy circular on these proposals? If not, I would now ask you that you mark your votes on ballot D for proposals six through nine. I would ask the scrutineers to collect the ballots. While we wait for the results of these votes, we would like to show you a brief video about how we at RBC Serve our clients and communities. We'll just wait a minute before we do that to make sure all the ballots are collected. Following the video, Gord Nixon will lead the next part of the meeting when shareholders will have a chance to ask questions. Now the video. Thank you. At this point in the meeting, our shareholders will have the opportunity to ask questions or to make comments. If you have a question, please proceed to the nearest microphone. We'd appreciate it if you give your name and tell us whether you're a shareholder or a proxy holder. If your question relates to a personal matter, please speak with the RBC employees at the information desk in the foyer. I now open the floor for questions, starting with microphone number one. Yes. My name's Emil Scrivney, and I'd like to thank the RBC Board of Directors for donating the CAD 250,000 to the Calgary Police Foundation. My question is, as demographics prevail with more senior clients representing the population, will RBC Visa credit cards cover medical travel insurance for those of us that are 65 and plus? Thank you very much for your question. A number of our cards do currently have medical insurance for people over 65. I think there's different terms and conditions and time limits. Dave McKay, who heads our personal and commercial banking business and is our guru on the credit card business, is with us. Dave, do you want to make any comments or no? Just That was a request. Thank you for being an RBC credit card holder. Certainly, it is a segment of the market that is growing, as you say, and more Canadians are retiring. As we look at the insurance and the cost of delivering that insurance and embedding that into our products is something that we have to evolve going forward. We have heard that issue from clients, and it is something we are committed to looking at in greater detail going forward. Thank you for your question. Thank you for being a cardholder. Yeah. Other questions? Yes, microphone number two. Ethan Hubberman. I am a shareholder as well as a customer and client. I asked a few years ago for smartphone applications to be delivered, and certainly RBC has delivered very well on that. I am also very happy with the website that RBC has for online banking. I would like to know. I know that with online banking, I also happen to have an RBC Direct Investing account, and I can see the asset value on the RBC Direct Investing account when I log in online to the website. I would like to know if that feature could be added to the smartphone app. Our guru. Stand up over here. Great question. We've invested a significant amount of money in our online banking capabilities, and we're investing significantly in our mobile banking capabilities. As you saw, we're the number one online bank in Canada. That feature and functionality is something we're looking at. We invest over CAD 50 million in our online and mobile banking platforms. I can't tell you exactly when it's coming, but it's certainly a feature and benefit that I'll take back and then see where it is in the development cycles. Thank you for your suggestion. I would just add to that. I think, as I said in my comments, that technology is evolving so quickly in our industry. Sometimes it's hard to always be first in everything, but it's certainly something that, as I say, one of our strategic focuses is to make sure that we take advantage of our financial strength to lead the competition in terms of investing in technology. It doesn't mean we'll always be first in every area because people have different priorities, but it's something that we put a lot of focus on. Microphone number one. President Nixon, my name is Brian Northard. I'm a shareholder and a proxy holder. Would the Board of Directors care to comment on measures in place to prevent our bank's information systems from being compromised by external forces? Thank you very much for your question. It is not only a great question, it's one of the most important issues that I think all industry faces, and certainly the financial industry faces, and it's certainly getting a lot of attention. We have a lot of processes internally in terms of data integrity, information protection, and a significant investment from a technology perspective in preserving both the privacy and integrity of people's information. We actually, as a matter of interest, have a significant review currently underway where we've brought in an external third party to review our technology and operating systems really focused primarily around the area of cybersecurity. We think we have best practices, but it is an area, as you know, where the criminals and bad people are equally as sophisticated as those that are trying to protect it. You have seen some recent attacks, particularly in the U.S., and that has included some attacks on some of their financial institutions. It is a major priority. It is a major priority for our board of directors, for our risk management committee of the board. It is a major priority for OSFI, our primary regulator, and there is a number of industry initiatives focused on it. As I say, internally, there is a significant focus and an investment to ensure that we do everything we possibly can in terms of protecting our clients and our industry, the whole industry, against cyber attacks and cybersecurity. It is a frightening number, the number of attacks that we have on our systems on a daily basis. The good news is they do not get through, and our firewalls and our various protective measures have served us extremely well. But as I say, it is something that you just cannot take for granted. It is an area that is unfortunately going to be an increasing growing expense center because it is just the nature of the industry and part of the transformation of the industry to a much more electronic delivery. I hope that answers your question. Thank you, indeed. Thank you for your question. Yes, microphone number five. Yes, Mr. Nixon. Thank you. My name is Ralph Biden. I am here as a proxy for my wife. I realize this is now history, that we have read a lot about it in the press about your venture into Florida. I wonder if you would tell us in your words what happened. Sorry, what happened? Yes. Into Florida. Well, the first thing I would say is we are still in Florida. As I said in my comments, we have an internet bank in the U.S. We serve about 170,000 Canadian customers through that delivery mechanism. As I say, it is a great product offering, and it is a great low-cost, effective cross-border product available to our Canadian customers. But it does not provide branch services in the U.S. We made the decision essentially, and it was not Florida. It was based actually in North Carolina. The head office of our bank was in North Carolina, although we did have a presence in Florida as well. The decision was simply made that we looked at the opportunities in the U.S. in the retail banking space, the level of competition, our position in the marketplace, our ability to generate a strong return on the investment that we were making, that we had better ways to deploy our capital outside of the branch banking business in the U.S. We looked at it for a number of years and took advantage of an improvement in the market, I guess it was a couple of years ago, and made the decision, as I say, to exit what was a very underperforming business, generating very low returns to our shareholders, and have deployed the capital in other businesses that are generating more positive returns. It was important to us, as I emphasized, though, that we maintain a presence, particularly for our Canadian and our high-net-worth clients in the U.S., but particularly our Canadian customers. That was why we essentially built our internet-based bank, which does provide credit cards, banking products, et cetera, to our Canadian customers. Further questions? Microphone number one, and then we'll go to number two. Mr. Nixon, my name is Brian Farrell. I'm a longtime shareholder, proud to be so, and congratulate you on a successful year in the past. Thank you, Brian. My interest is in the annual report as an amateur analyst evaluating my investments. I look to the end of the report in the past where there's been a 12-year summary of the historical parameters for the company. I find this very informative. In the past, and you had this history in the annual report as far back as 1977, by my own observation. My question is, recently, you have moved to a more limited financial history reporting. New rules, regulations, I understand that. My question is that, with the limited reporting, I would like to know if there were any changes or corrections to the history, the past years, that may not have been reported, but were actually adjusted in the previous years that would affect the earnings and earnings per share numbers that may have been observed in a footnote or wherever, but have not been reported in the tables. Thank you, Brian, for your question. I think with respect to information, the answer would be no, but I am going to turn to my financial expert, our CFO and Chief Administrative Officer, Janice Fukakusa. It is probably complicated by the fact of our major IFRS conversion last year. Yeah. Thank you for your question, and that is the complexity. In 2010, effectively, we converted to International Financial Reporting Standards, which is our new accounting base. In the process of doing that, there were certain adjustments that were made that are highlighted in the annual report. We also only restated up to 2010. So in terms of providing a longer history than that, the accounting base is different, and we did not go back 10 years. We only went back for 2 years. So what you have there is the new reporting standard, and if you have a bit of time after this meeting, we can take you through some of the major changes that are detailed in the annual report that we issued. But on the old methodology, the answer would be there would be no adjustments that would go back to an extended period of time. As I say, it is just complicated by the fact that all of the Canadian banks were required under regulation to move towards an international standard as opposed to the Canadian traditional GAAP standard, and that took place last year. Microphone number 2, I think there was a question. Yeah. Andrew Pollack of Calgary, Alberta. Yes. I'm a beneficial holder of 20 shares of Royal Bank common stock. My question is about the impact of your board of directors on the functioning of the bank. The day-to-day operations are performed by the bank's employees, and yet the bank obviously values having a very high-quality board of directors. I know you're both, as a non-independent director. But how does the board's strength impact the day-to-day operations of the bank, and what are the long-term benefits of having such a strong board of directors? Thank you. Do you want my perspective, or do you want our Chairman's perspective? It may be different. He wants mine. The board delegates to management the day-to-day operations. So our impact on day-to-day operations would be very minimal, save and except in our broad oversight role if things go wrong. The board's role, though, in working with management to set the strategic direction of the bank and oversight of the execution of that direction is one of its most important roles. The only role that would be more important than that is the board's role in choosing the Chief Executive and approving the choice of the other senior officers who then carry out the strategic direction that has been agreed upon. I think, and we've seen in the last number of years, that the role of the board has become more important, and people have scrutinized it much more. In the case of the bank, the regulators expect the board to play a very significant role in the stewardship of the bank, ensuring that the bank complies with all laws and regulations, there are a lot of regulations tied to the banking business now. Ensuring that the financial statements through the audit committee properly disclose the financial condition of the company. Also the risk committee, which has a more important role in a bank than in most other companies because of the nature of the bank's business. It plays an important oversight and guiding role on matters of risk. In the end, having said all that, I still think the most important role is making sure that we have the right talent there at the bank to carry out the functions, and as our results indicate, we have done very well in that regard. Management's view is they do a great job. The only thing I would add to that, because I do think it is important, and a lot of credit should be given to groups like MÉDAC and Ms. Cordova and many other areas around corporate governance. The quality of discussion, the quality of governance, the challenging of management, which is a very important role of the board, it has improved so dramatically over the last number of years, and it is partially due to a lot of advocacy work done around corporate governance and areas like that. It does not mean it is perfect today, but it really is a very robust environment and relationship between management and the board today. I should not say this with some of our directors having been on the board for many years, but I can assure you, when I first started going to board meetings as a more junior level of management, that level of discussion and level of interchange and so forth was not there to the same degree. So it certainly has come a long way, in my view, looking at it from management's perspective. Any other questions? Yes, just a comment. The MÉDAC is all to make present his member, and we hope we have member like Mr. Pollack with us because he take the word in the general assembly. What we try to do is to have more and more people like him to bring their ideas on general assembly of the bank and other company on the market. Mr. President, Mr. Nixon, thank you for your understanding. Merci beaucoup. Merci. Bienvenu. Thank you. If there are no further questions from shareholders, I will now turn the meeting back to David. Thanks, Gord. I'll now call on Joe Chirico to report on the preliminary voting results, which are also posted on the screens. Copies of the voting results will be available at the information desk after the meeting and posted on the bank's website. Joe. For the information of shareholders, the scrutineers wish to report that 757,573,471 shares, or 52.4% of the 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 17 nominees named in the proxy circular, with each nominee receiving in excess of 96.38% in favor. The results for appointment of auditor are 96.83% voted in favor of Deloitte LLP and 3.17% withheld from voting. The results on the advisory resolution to accept the approach to executive compensation, 93.81% voted in favor and 6.19% voted against. The results for shareholder proposals are as follows. Proposal number one regarding pension plans, more disclosure about their oversight, 2.70% voted in favor, 96.63% voted against, and less than 1% abstained. Proposal number two regarding the equality treatment under the pension plan, 2.81% voted in favor, 96.76% voted against, and less than 1% abstained. Proposal number three regarding gender equality in executive positions, 5.08% voted in favor, 94.46% voted against, and less than 1% abstained. Proposal number four regarding equity ratio, 2.54% voted in favor, 96.92% voted against, and less than 1% abstained. Proposal number five regarding summary of discussions at annual general meetings and more sustained dialogue with shareholders, 2.73% voted in favor, 96.80% voted against, and less than 1% abstained. Proposal number six regarding proposed amendment to the bylaws of the bank, 2.02% voted in favor, 97.49% voted against, less than 1% abstained. Proposal number seven regarding the revocation of the appointment of Deloitte LLP as auditor of the bank, 1.54% voted in favor, 97.88% voted against, and less than 1% abstained. Proposal number eight regarding proposed amendment to bylaw 2, Section 1.1, 3.05% voted in favor, 96.37% voted against, and less than 1% abstained. Proposal number nine regarding special resolution, proposed amendment to bylaw 1, Section 1.1, 2.68% voted in favor, 96.71% voted against, and less than 1% abstained. Thank you, Joe Chirico. I now declare that the 17 nominees named in the proxy circular have been duly elected as directors. Deloitte LLP has been appointed as the auditor. The advisory vote to accept the bank's approach to executive compensation has been approved, and each of the shareholder proposals has been defeated. Ladies and gentlemen, I sincerely want to thank you for your participation today. I will conclude by thanking our 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 shareholders, thank you all for your efforts and your contribution to RBC's success in 2012 and its continuing success this year. The meeting is now concluded.