Exhibit 6
TEN-YEAR STATISTICAL REVIEW
Ten-Year Statistical Review
- --------------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
$ millions, for the years ended October 31 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993
- --------------------------------------------------------------------------------------------------------------------------------
Net interest income (TEB)(1) $ 5,621 $ 4,693 $ 4,413 $ 4,537 $4,438 $4,641 $4,567 $4,169 $4,107 $3,835
Deduct taxable equivalent adjustment 111 144 131 129 101 124 104 95 105 90
- --------------------------------------------------------------------------------------------------------------------------------
Net interest income
(consolidated statement of income basis) 5,510 4,549 4,282 4,408 4,337 4,517 4,463 4,074 4,002 3,745
Non-interest income 5,531 6,613 7,797 5,728 4,804 3,980 2,892 2,258 2,252 1,903
- --------------------------------------------------------------------------------------------------------------------------------
Total revenue 11,041 11,162 12,079 10,136 9,141 8,497 7,355 6,332 6,254 5,648
Provision for credit losses 1,500 1,100 1,220 750 480 610 480 680 880 920
Non-interest expenses 9,129 8,226 8,096 7,998 7,125 5,372 4,584 3,991 3,907 3,544
- --------------------------------------------------------------------------------------------------------------------------------
Income before taxes and
non-controlling interests 412 1,836 2,763 1,388 1,536 2,515 2,291 1,661 1,467 1,184
Income taxes (279) 92 641 320 460 937 911 635 550 435
Non-controlling interests
in net income of subsidiaries 38 58 62 39 20 27 14 11 27 19
- --------------------------------------------------------------------------------------------------------------------------------
Net income $ 653 $ 1,686 $ 2,060 $ 1,029 $1,056 $1,551 $1,366 $1,015 $ 890 $ 730
================================================================================================================================
Dividends on preferred shares $ 161 $ 121 $ 128 $ 112 $ 116 $ 98 $ 112 $ 111 $ 141 $ 131
Net income applicable
to common shares $ 492 $ 1,565 $ 1,932 $ 917 $ 940 $1,453 $1,254 $ 904 $ 749 $ 599
================================================================================================================================
(1) Taxable equivalent basis, as described in footnote (1) in Quarterly Review
on page 127.
- ----------------------------------------------------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
$ millions, as at October 31 2002 2001 2000 1999 1998
- ----------------------------------------------------------------------------------------------------
Assets
Cash resources $ 9,512 $ 11,350 $ 10,679 $ 12,527 $ 10,795
Securities 65,292 74,794 69,242 59,492 60,970
Loans(1)
Residential mortgages 66,612 58,751 51,921 46,637 43,199
Personal and credit card loans 30,784 28,411 27,939 24,751 24,563
Business and government loans 41,961 46,693 47,567 47,552 49,811
Securities borrowed or purchased
under resale agreements 16,020 24,079 20,461 19,158 36,293
Allowance for credit losses (2,288) (2,294) (2,236) (1,748) (1,609)
Customers' liability under acceptances 6,848 8,100 9,088 9,296 10,995
Derivative instruments market valuation 24,717 25,723 23,847 24,449 37,157
Land, buildings and equipment 2,247 1,769 1,508 2,213 2,201
Other assets 11,588 10,098 7,686 6,004 7,055
- ----------------------------------------------------------------------------------------------------
$273,293 $287,474 $267,702 $250,331 $281,430
====================================================================================================
Liabilities and shareholders' equity
Deposits
Individuals $ 67,975 $ 66,826 $ 63,109 $ 60,878 $ 59,993
Businesses and governments 117,986 114,270 103,141 85,940 84,862
Banks 10,669 13,256 13,382 13,223 15,020
Acceptances 6,878 8,100 9,088 9,296 10,995
Obligations related to securities lent or sold
short or under repurchase agreements 18,051 32,616 28,191 29,203 48,659
Derivative instruments market valuation 24,794 26,395 24,374 25,097 36,245
Other liabilities 10,980 10,112 10,630 11,092 9,806
Subordinated indebtedness 3,627 3,999 4,418 4,544 4,714
Shareholders' equity
Preferred shares 3,088 2,299 1,876 1,933 1,961
Common shares 2,842 2,827 2,868 3,035 3,128
Contributed surplus 26 -- -- -- --
Retained earnings 6,377 6,774 6,625 6,090 6,047
- ----------------------------------------------------------------------------------------------------
$273,293 $287,474 $267,702 $250,331 $281,430
====================================================================================================
$ millions, as at October 31 1997 1996 1995 1994 1993
- ----------------------------------------------------------------------------------------------------
Assets
Cash resources $ 7,931 $ 8,120 $ 15,419 $ 9,436 $ 7,880
Securities 45,252 39,817 38,255 28,753 24,167
Loans(1)
Residential mortgages 40,039 36,932 34,686 32,248 30,746
Personal and credit card loans 22,305 20,132 18,716 16,953 14,802
Business and government loans 47,107 45,642 44,013 45,715 48,529
Securities borrowed or purchased
under resale agreements 37,629 32,534 14,173 6,584 5,124
Allowance for credit losses (1,591) (1,422) (1,467) (1,562) (2,020)
Customers' liability under acceptances 10,375 8,733 8,315 7,259 7,069
Derivative instruments market valuation 21,977 13,314 9,207 7,100 7,600
Land, buildings and equipment 2,071 1,983 2,013 1,995 1,951
Other assets 4,894 4,447 3,178 2,894 2,268
- ----------------------------------------------------------------------------------------------------
$237,989 $210,232 $186,508 $157,375 $148,116
====================================================================================================
Liabilities and shareholders' equity
Deposits
Individuals $ 59,188 $ 61,484 $ 61,061 $ 59,040 $ 57,265
Businesses and governments 60,272 43,705 45,738 36,213 34,357
Banks 19,438 22,232 22,683 20,209 19,283
Acceptances 10,375 8,733 8,315 7,259 7,069
Obligations related to securities lent or sold
short or under repurchase agreements 43,932 41,907 22,211 10,569 7,523
Derivative instruments market valuation 21,376 12,500 8,135 6,373 6,860
Other liabilities 8,267 7,041 6,015 5,836 4,802
Subordinated indebtedness 4,894 3,892 3,671 3,441 3,003
Shareholders' equity
Preferred shares 1,518 1,068 1,355 1,691 1,878
Common shares 3,105 3,055 3,202 3,200 3,016
Contributed surplus -- -- -- -- --
Retained earnings 5,624 4,615 4,122 3,544 3,060
- ----------------------------------------------------------------------------------------------------
$237,989 $210,232 $186,508 $157,375 $148,116
====================================================================================================
(1) Comparative figures have been reclassified to conform with the
presentation used in 2002.
- --------------------------------------------------------------------------------
128
CIBC ANNUAL REPORT 2002
TEN-YEAR STATISTICAL REVIEW
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
$ millions, as at or for the years ended October 31 2002 2001 2000 1999 1998
- ----------------------------------------------------------------------------------------------------------
Balance at beginning of year $11,900 $11,369 $11,058 $11,136 $10,247
Adjustment for change in accounting policy (42)(1) (140)(2) -- -- --
Premium on redemption/repurchase
of share capital Preferred -- -- (17) -- (10)
Common (269) (736) (873) (397) --
Changes in share capital Preferred 800 400 (80) -- 391
Common 15 (41) (167) (93) 23
Changes in contributed surplus 26 -- -- -- --
Net income 653 1,686 2,060 1,029 1,056
Dividends Preferred (161) (121) (128) (112) (116)
Common (577) (536) (501) (492) (498)
Other (12) 19 17 (13) 43
- ----------------------------------------------------------------------------------------------------------
Balance at end of year $12,333 $11,900 $11,369 $11,058 $11,136
==========================================================================================================
$ millions, as at or for the years ended October 31 1997 1996 1995 1994 1993
- ---------------------------------------------------------------------------------------------------
Balance at beginning of year $ 8,738 $8,679 $8,435 $7,954 $6,638
Adjustment for change in accounting policy -- (94)(3) -- -- --
Premium on redemption/repurchase
of share capital Preferred -- (34) -- -- --
Common -- (281) -- -- --
Changes in share capital Preferred 436 (290) (336) (187) 418
Common 50 (147) 2 184 583
Changes in contributed surplus -- -- -- -- --
Net income 1,551 1,366 1,015 890 730
Dividends Preferred (98) (112) (111) (141) (131)
Common (434) (352) (320) (281) (263)
Other 4 3 (6) 16 (21)
- ---------------------------------------------------------------------------------------------------
Balance at end of year $10,247 $8,738 $8,679 $8,435 $7,954
===================================================================================================
(1) Represents the effect of implementing the CICA handbook section 3870,
"Stock-Based Compensation and Other Stock-Based Payments," which
introduced the requirement to account for SARs based on quoted market
price on an ongoing basis. Additionally, CIBC adopted the fair value-based
method to account for stock transactions with employees and non-officer
Directors, as encouraged by section 3870.
(2) Represents the effect of implementing the CICA handbook section 3461,
"Employee Future Benefits," which introduced the requirement to accrue the
cost of post-retirement and post-employment benefits during the years
employees provide services to CIBC.
(3) Represents the effect of implementing the CICA handbook section 3025,
"Impaired Loans," which introduced the requirement to discount expected
cash flows on impaired loans when determining the allowance for credit
losses.
- ----------------------------------------------------------------------------------------------
SELECT FINANCIAL MEASURES
As at or for the years ended October 31 2002 2001 2000 1999 1998
- ----------------------------------------------------------------------------------------------
Return on common equity(1) 5.1% 16.1% 20.5% 9.8% 10.3%
Return on average assets 0.22% 0.60% 0.78% 0.38% 0.38%
Average common
shareholders' equity ($ millions) $ 9,566 $ 9,739 $ 9,420 $ 9,323 $ 9,100
Average assets ($ millions) $292,510 $278,798 $263,119 $271,844 $278,823
Average assets to average common equity 30.6 28.6 27.9 29.2 30.6
Tier 1 capital ratio 8.7% 9.0% 8.7% 8.3% 7.7%
Total capital ratio 11.3% 12.0% 12.1% 11.5% 10.8%
Net interest margin (TEB)(2) 1.92% 1.68% 1.68% 1.67% 1.59%
Efficiency ratio(3) 81.9% 72.8% 66.3% 77.9% 77.1%
==============================================================================================
As at or for the years ended October 31 1997 1996 1995 1994 1993
- ----------------------------------------------------------------------------------------------
Return on common equity(1) 17.7% 17.1% 12.9% 11.7% 10.6%
Return on average assets 0.66% 0.70% 0.61% 0.57% 0.51%
Average common
shareholders' equity ($ millions) $ 8,195 $ 7,332 $ 7,003 $ 6,393 $ 5,664
Average assets ($ millions) $236,025 $196,063 $165,846 $155,640 $144,041
Average assets to average common equity 28.8 26.7 23.7 24.3 25.4
Tier 1 capital ratio 7.0% 6.6% 7.0% 7.1% 6.9%
Total capital ratio 9.8% 9.0% 9.6% 9.9% 9.7%
Net interest margin (TEB)(2) 1.97% 2.33% 2.51% 2.64% 2.66%
Efficiency ratio(3) 62.3% 61.5% 62.1% 61.4% 61.8%
==============================================================================================
(1) Net income applicable to common shares divided by average common
shareholders' equity for the year.
(2) Taxable equivalent basis, as described in footnote (1) in Quarterly Review
on page 127.
(3) Efficiency ratio may also be referred to as non-interest expenses to
revenue ratio. Calculated as non-interest expenses divided by the sum of
net interest income (taxable equivalent basis) and non-interest income.
- ------------------------------------------------------------------------------------------------------
COMMON SHARE INFORMATION
As at or for the years ended October 31 2002 2001 2000 1999 1998
- ------------------------------------------------------------------------------------------------------
Average number outstanding (thousands) 360,553 372,305 388,951 409,789 415,030
Per share - basic earnings(1) $ 1.37 $ 4.19 $ 4.95 $ 2.23 $ 2.24
- diluted earnings(1) $ 1.35 $ 4.13 $ 4.90 $ 2.21 $ 2.22
- dividends $ 1.60 $ 1.44 $ 1.29 $ 1.20 $ 1.20
- book value(2) $ 25.75 $ 26.44 $ 25.17 $ 22.68 $ 22.08
Share price(3) - high $ 57.70 $ 57.00 $ 50.50 $ 42.60 $ 59.80
- low $ 34.26 $ 43.20 $ 30.50 $ 28.00 $ 24.40
- close $ 38.75 $ 48.82 $ 48.40 $ 31.70 $ 30.65
Price to earnings multiple(4) (12-month trailing) 28.9 11.7 9.8 14.2 13.7
Dividend payout ratio(5) >100% 34.2% 25.9% 53.6% 53.0%
======================================================================================================
As at or for the years ended October 31 1997 1996 1995 1994 1993
- -------------------------------------------------------------------------------------------------------
Average number outstanding (thousands) 413,545 415,028 432,614 425,464 401,366
Per share - basic earnings(1) $ 3.51 $ 2.94 $ 2.09 $ 1.76 $ 1.50
- diluted earnings(1) $ 3.49 $ 2.93 $ 2.09 $ 1.76 $ 1.50
- dividends $ 1.05 $ 0.85 $ 0.74 $ 0.66 $ 0.66
- book value(2) $ 21.07 $ 18.62 $ 16.93 $ 15.59 $ 14.45
Share price(3) - high $ 41.75 $ 28.30 $ 18.57 $ 18.13 $ 16.82
- low $ 26.55 $ 18.00 $ 15.57 $ 14.00 $ 11.82
- close $ 41.20 $ 27.85 $ 18.19 $ 16.00 $ 15.82
Price to earnings multiple(4) (12-month trailing) 11.7 9.5 8.7 9.1 10.6
Dividend payout ratio(5) 29.9% 28.1% 35.4% 37.5% 43.9%
=======================================================================================================
(1) On November 1, 2001, CIBC retroactively adopted the requirements of the
CICA handbook section 3500, "Earnings Per Share." Comparative figures have
been restated.
(2) Common shareholders' equity divided by the number of common shares issued
and outstanding at end of year.
(3) The high and low price during the year, and closing price on the last
trading day of the year, on the Toronto Stock Exchange.
(4) Closing common share price expressed as a multiple of net income per
common share for the year. Comparative figures have been restated to
conform with the presentation used in 2002.
(5) Total common share dividends divided by net income applicable to common
shares for the year.
- ----------------------------------------------------------------------------------------------------------------------------
DIVIDENDS ON PREFERRED SHARES(1)
For the years ended October 31 2002 2001 2000 1999 1998 1997 1996 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------------------------
Class A Series 4 -- -- -- -- -- $3.4106 $4.7360 $6.0900 $4.5840 $4.5840
Series 5 -- -- -- -- -- $0.8240 $1.1600 $1.4728 $1.1057 $1.1273
Series 6 -- -- -- -- -- -- -- -- $2.4349 $2.2500
Series 7 -- -- -- -- -- -- -- $ 4,208 $ 3,507 $ 4,034
Series 8 -- -- -- -- -- -- -- $0.6706 $2.2200 $2.2200
Series 9 -- -- -- -- $1.1375 $2.2750 $2.2750 $2.2750 $2.2750 $2.2750
Series 10 -- -- -- -- -- -- $2.8175 $2.5555 $2.5786 $2.4423
Series 11 -- -- -- -- -- -- $2.4060 $2.2125 $2.2125 $2.2125
Series 12 -- -- $2.4100 $2.4267 $2.4097 $2.2462 $2.2188 $2.1856 $2.2054 $1.4983
Series 13 -- -- $1.7500 $1.7500 $1.7500 $1.7500 $1.7500 $1.7500 $1.7500 $1.2490
Series 14 $1.4875 $1.4875 $1.4875 $1.4875 $1.4875 $1.4870 $1.1197 -- -- --
Series 15 $1.4125 $1.4125 $1.4125 $1.4125 $1.4125 $1.4110 -- -- -- --
Series 16 $2.2244 $2.1724 $2.0948 $2.1093 $2.0946 $1.1367 -- -- -- --
Series 17 $1.3625 $1.3625 $1.3625 $1.3625 $1.3625 $0.7880 -- -- -- --
Series 18 $1.3750 $1.3750 $1.3750 $1.3750 $1.3628 -- -- -- -- --
Series 19 $1.2375 $1.2375 $1.2375 $1.2375 $0.7404 -- -- -- -- --
Series 20 $2.0276 $1.9801 $1.9095 $1.9227 $1.1703 -- -- -- -- --
Series 21 $1.5000 $1.5000 $1.1372 -- -- -- -- -- -- --
Series 22 $2.4606 $2.4031 $1.7713 -- -- -- -- -- -- --
Series 23 $1.3250 $0.9938 -- -- -- -- -- -- -- --
Series 24 $1.2962 -- -- -- -- -- -- -- -- --
Series 25 $0.8048 -- -- -- -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------
(1) The dividends are adjusted for the number of days during the year that the
share is outstanding at the time of issuance and redemption.
- --------------------------------------------------------------------------------
129
CIBC ANNUAL REPORT 2002
DIRECTORS OF THE BANK
Directors of the Bank
- --------------------------------------------------------------------------------
DOUGLAS G. BASSETT ('80)
O.C., O.Ont., LL.D., D.Litt.
Chairman
Windward Investments
(Toronto, Ontario, Canada)
JALYNN H. BENNETT ('94)
C.M.
President
Jalynn H. Bennett and Associates Ltd.
(Toronto, Ontario, Canada)
THE LORD BLACK OF
CROSSHARBOUR ('77)
P.C. (Can), O.C., KCSG
Chairman and
Chief Executive Officer
Argus Corporation Limited
(London, England)
PAT M. DELBRIDGE ('93)
President
PDA Partners Inc.
(Toronto, Ontario, Canada)
WILLIAM L. DUKE ('91)
Farmer
(Redvers, Saskatchewan, Canada)
IVAN E.H. DUVAR ('89)
B.E., DCL, P.Eng.
President and
Chief Executive Officer
MIJAC Inc.
(Amherst, Nova Scotia, Canada)
WILLIAM A. ETHERINGTON ('94)
Lead Director
CIBC
(Toronto, Ontario, Canada)
A.L. FLOOD ('89)
C.M.
Company Director
CIBC
(Thornhill, Ontario, Canada)
MARGOT A. FRANSSEN ('92)
O.C.
President and Partner
The Body Shop Canada
(Toronto, Ontario, Canada)
R.D. FULLERTON ('74)
Company Director
CIBC
(Toronto, Ontario, Canada)
HON. GORDON D. GIFFIN ('01)
Senior Partner
McKenna Long & Aldridge
(Atlanta, Georgia, U.S.A.)
HON. JAMES A. GRANT ('91)
P.C., Q.C.
Partner
Stikeman Elliott
(Montreal, Quebec, Canada)
ALBERT E.P. HICKMAN ('89)
Chairman and President
Hickman Motors Limited
(St. John's, Newfoundland,
and Labrador, Canada)
JOHN S. HUNKIN ('93)
Chairman and
Chief Executive Officer
CIBC
(Toronto, Ontario, Canada)
W. DARCY McKEOUGH ('78)
O.C., B.A., LL.D.
Chairman
McKeough Supply Inc.
(Chatham, Ontario, Canada)
ARNOLD NAIMARK ('87)
O.C., M.D., LL.D., F.R.C.P.(C), F.R.S. (Can.)
Past President
The University of Manitoba
Director
Centre for the Advancement
of Medicine
(Winnipeg, Manitoba, Canada)
MICHAEL E.J. PHELPS ('89)
O.C., B.A., LL.B., LL.M., LL.D.
Chairman
Dornoch Capital Inc.
(Vancouver, British Columbia, Canada)
CHARLES SIROIS ('97)
C.M., B.Fin., M.Fin., C.Q.
Chairman and
Chief Executive Officer
Telesystem Ltd.
(Montreal, Quebec, Canada)
STEPHEN G. SNYDER ('00)
B.Sc., M.B.A.
President and
Chief Executive Officer
TransAlta Corporation
(Calgary, Alberta, Canada)
W. GALEN WESTON ('78)
O.C.
Chairman
George Weston Limited
Loblaw Companies Limited
(Toronto, Ontario, Canada)
As at October 31, 2002, the directors and senior officers of CIBC as a group,
beneficially owned, directly or indirectly, or exercised control or direction of
less than 1% of the outstanding common shares of CIBC. To the knowledge of CIBC,
no director or senior officer of CIBC beneficially owned or controlled voting
securities of any subsidiaries of CIBC.
- --------------------------------------------------------------------------------
130
CIBC ANNUAL REPORT 2002
SENIOR OFFICERS
Senior Officers
- --------------------------------------------------------------------------------
SENIOR EXECUTIVE TEAM
HUNKIN, J.S. (JOHN)
Chairman and
Chief Executive Officer
DENHAM, G.H. (JILL)
Vice-Chair
CIBC Retail Markets
FOX, W.C. (WAYNE)
Vice-Chair and
Chief Risk Officer
Treasury, Balance Sheet and
Risk Management
KASSIE, D.J. (DAVID)
Vice-Chair
CIBC
Chairman and
Chief Executive Officer
CIBC World Markets
LALONDE, R.A. (RON)
Senior Executive Vice-President
and Chief Administrative Officer
Administration
McCAUGHEY, G.T. (GERALD)
Vice-Chair
CIBC Wealth Management
VENN, R.E. (RICHARD)
Senior Executive Vice-President
Corporate Development
WOELLER, M.D. (MIKE)
Senior Executive Vice-President
and Chief Information Officer
Technology and Operations
OFFICERS
ADOLPHE, K.J.E. (KEVIN)
Managing Director and
Chief Administrative
and Financial Officer
CIBC World Markets
BAXENDALE, S.A. (SONIA)
Executive Vice-President
Global Private Banking and
Investment Management Services
CIBC Wealth Management
CAPATIDES, M.G. (MICHAEL)
Executive Vice-President and
General Counsel
Legal and Compliance
Administration
CATHCART, R. (RON)
Executive Vice-President
Retail Credit Adjudication
Treasury, Balance Sheet and
Risk Management
CHORNOBOY, D. (DOUGLAS)
Senior Vice-President and
Controller
Administration
CROUCHER, C. (CHRISTINE)
Executive Vice-President
CIBC Card Products,
Collections, Retail and Small
Business Lending
ELLIOTT, M.A. (MARY ANNE)
Executive Vice-President
Retail Markets Projects
CIBC Retail Markets
FERGUSON, D.S. (DAN)
Executive Vice-President
Corporate and Commercial Adjudication
Treasury, Balance Sheet and
Risk Management
FISHER, P.T. (PAUL)
Vice-President and
Corporate Secretary
Administration
GETTINGS, W.E. (ED)
Executive Vice-President
CIBC Mortgages Inc. and Insurance
CIBC Retail Markets
GRAHAM, S.D. (STEPHEN)
Executive Vice-President and
Chief Marketing Officer
CIBC Retail Markets
GRAY, C.J. (CAROL)
Executive Vice-President
Small Business Banking
CIBC Retail Markets
HORROCKS, M.G. (MICHAEL)
Executive Vice-President and
Treasurer
Treasury, Balance Sheet and
Risk Management
HUMBER, K.A. (KATHRYN)
Senior Vice-President
Investor Relations
Administration
KILGOUR, P.K.M. (KEN)
Executive Vice-President
Credit Asset and Merchant Banking
Portfolio Management
Treasury, Balance Sheet
and Risk Management
LALONDE, K.W. (KENN)
Executive Vice-President
Personal Banking
CIBC Retail Markets
LAUZON, M. (MICHEL)
President and
Chief Operating Officer
TAL Global Asset Management
CIBC Wealth Management
LINDSAY, D.R. (DON)
Managing Director
Canadian Investment and
Corporate Banking and
Head of Asia Pacific Region
CIBC World Markets
MacDONALD, B.E. (BARBARA)
Senior Vice-President
and Chief Accountant
Administration
MacLACHLAN, L.W. (LACH)
Senior Vice-President
and Ombudsman
Office of the Chairman and
Chief Executive Officer
McGIRR, S.R. (STEVE)
Managing Director
Global Debt Capital Markets and
Foreign Exchange
CIBC World Markets
McNAIR, S.M. (STEVEN)
Executive Vice-President
Imperial Service
CIBC Wealth Management
McSHERRY, J.R. (JAMES)
Executive Vice-President
and Managing Director
Commercial Banking
CIBC World Markets
MONAHAN, T.S. (TOM)
Managing Director and
Head of CIBC Wood Gundy
and CIBC Investors Edge
CIBC Wealth Management
PHILLIPS, J.M. (JOYCE)
Executive Vice-President
Human Resources
Administration
PURI, P. (PANKAJ)
Executive Vice-President
and Chief Auditor
Internal Audit and Corporate Security
Administration
RAFTUS, S.T. (STUART)
Managing Director and
Head of CIBC Oppenheimer
Private Client Group
CIBC Wealth Management
ROGERS, P.D. (PAUL)
Managing Director
USA Region
CIBC World Markets
SCHMID, G. (GERRARD)
Executive Vice-President and
Chief Operating Officer
CIBC Retail Markets
SHAW, B.G. (BRIAN)
Managing Director
Institutional Equities and
Commodities Products
CIBC World Markets
WAITE, R.E. (BOB)
Senior Vice-President
Corporate Communications
and Public Affairs
Administration
WOODS, T.D. (TOM)
Executive Vice-President and
Chief Financial Officer
Administration
- --------------------------------------------------------------------------------
131
CIBC ANNUAL REPORT 2002
CORPORATE GOVERNANCE
For more information on how CIBC manages and governs, see:
Lead Director's Message
page 12
Management of Risk and
Balance Sheet Resources
page 55
Regulatory
page 70
Related Party Procedures
page 70
- --------------------------------------------------------------------------------
Corporate Governance
- --------------------------------------------------------------------------------
CIBC's Board of Directors regularly reviews enhancements to its governance
practices. Certain events in the past year have reinforced the need for
adherence to the best corporate governance principles, as well as the need to do
so with integrity and accountability. CIBC Lead Director, William Etherington,
discusses some of the initiatives the board has taken to enhance CIBC's
governance policies and practices in 2002 in his Message on page 12 of this
report.
The board believes that good governance requires constant review and
adjustment; it requires both proper structure and principled execution. The
fundamental statutory duty of the Board of Directors is to supervise the
management of the business of CIBC. The board recognizes the importance of the
protection and enhancement of long-term shareholder value, particularly in this
current unsettled environment.
In 2001, the board initiated a formal assessment process for itself and
its members; this has now become an ongoing process. In 2002, the board used the
results of this assessment to assist it in enhancing its governance practices.
Through the board, CIBC has made substantial progress in strengthening its
governance practices and has responded quickly and effectively to external
events which have eroded investor confidence in the North American marketplace.
The quality, composition and effectiveness of the board, both collectively
and of its individual directors, are of fundamental importance. The Board of
Directors of CIBC has delegated some of the detailed work to monitor and enhance
these governance elements to the Corporate Governance Committee (although it
remains a significant responsibility of the full board). This committee
nominates directors for approval by the board and by the shareholders at the
annual meeting. Such appointments are made annually and reflect the committee's
evaluation of the individual's contributions. The board seeks the highest
quality individuals to serve on the board, while also considering diversity, the
geographical size of Canada, and the importance of CIBC's business interests in
jurisdictions outside of Canada.
The Corporate Governance Committee also makes recommendations to the board
concerning any proposed changes in the objectives or responsibilities of the
board and its committees. The terms of reference of all committees were amended
by the board in June 2002 with the re-allocation of a number of duties between
committees. In addition, the mandates of the chairman and chief executive
officer and of the lead director were revised to clarify their respective
duties.
All committees review the information required to perform committee work
effectively. In certain cases, this will include the retention of independent
consultants and advisers. For some years, the Management Resources and
Compensation and the Audit committees have retained consulting firms from both
Canada and the United States to advise them on various issues. In 2001 and early
2002, the Corporate Governance Committee also retained an external consultant to
provide services related to board, committee and director assessment.
The Canada Deposit Insurance Corporation (CDIC) issued new standards of
sound business and financial practices in 2002 to which all its member
institutions, including CIBC, are required to adhere. Under the management of
the lead director and the Corporate Governance Committee, the board undertook a
self-assessment of its practices against these standards. The board also
received a report from management on its systems of internal controls and the
control framework in place at CIBC for the management of risk, based on the
results of an extensive control self-assessment process undertaken throughout
the corporation. CIBC has submitted to CDIC its required attestations of
compliance to the standards for the current reporting year, which include a
formal resolution passed by the Board of Directors. The system of internal
controls is part of the corporate governance structures, policies and procedures
which have enabled the board to conclude that CIBC is in full compliance with
the Guidelines for Corporate Governance established by the Toronto Stock
Exchange, and will be outlined in the Management Proxy Circular.
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CIBC ANNUAL REPORT 2002
BOARD COMMITTEES
Board Committees
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The board believes that its proper governance and effectiveness in carrying out
its duties is greatly enhanced by the use of committees. The mandates of each of
the four board committees were reviewed by each committee at the beginning of
2002. Revisions to these mandates were recommended to the full board on June 6,
2002, and changes were agreed upon.
The Corporate Governance Committee reviews corporate governance matters
pertaining to the Shareholders and the Board of Directors. The committee:
o Has the specific and ongoing responsibility to review the state of
CIBC's corporate governance as to quality and effectiveness and to
recommend enhancements to the Board of Directors.
o Reviews the performance of the chief executive officer (CEO) and
succession planning for the CEO.
o Reviews the role and composition of the board and its committees and
the methods and processes by which the board fulfills its duties.
o Reviews the performance of the board, its committees and the
directors.
o Considers board and committee agendas and the quality of material
being presented.
o Establishes criteria for election and re-election as a director,
thereby managing the director nomination process.
o Reviews and monitors CIBC's compliance with the CDIC standards
relating to board responsibilities.
Members: J.H. Bennett, I.E.H. Duvar, W.A. Etherington (Chair)*, J.A. Grant,
M.E.J. Phelps
The Management Resources and Compensation Committee provides, on behalf of the
board, detailed review, oversight and approval of CIBC's policies, practices and
procedures relating to human resources to ensure ongoing, long-term development
and deployment of high-calibre senior management resources. The committee:
o Reviews compensation to ensure the relationship between senior
management performance and compensation is appropriate and set with
reference to competitive benchmarks.
o Reviews human resource matters with emphasis on overall strategy and
programs relating to the recruitment, development and retention of
personnel.
o Reviews overall compensation programs.
o Monitors succession planning for senior management other than the
CEO.
o Approves investment policies and oversees the administration of the
pension plan to ensure fiduciary obligations are met in accordance
with established rules, policies and guidelines.
Members: J.H. Bennett, M.A. Franssen, M.E.J. Phelps (Chair), C. Sirois, S.G.
Snyder
The Audit Committee oversees CIBC's financial reporting procedures to satisfy
itself that there are adequate internal controls over accounting and financial
reporting systems. The committee:
o Reviews the annual and quarterly statements prior to approval by the
board and other published or regulatory financial statements.
o Reviews and monitors CIBC's compliance with the CDIC standards
relating to strategic management/business planning, risk management
process, operational risk management, fiduciary risk management,
control environment, independent internal audit and business
conduct/ethical behaviour.
o Examines the mandate, nature and scope of CIBC's internal and
external audit work, including the independence of the external
auditors.
o Monitors procedures established by the board to provide disclosure
of information to customers.
o Reviews and monitors legislative amendments impacting the financial
services sector.
o Meets annually, together with the Risk Management Committee, with
the Superintendent of Financial Institutions Canada; and regularly
with CIBC's executive vice-president, legal and compliance, chief
accountant, chief auditor and the shareholders' auditors.
o Acts as the Audit Committee of certain CIBC subsidiaries and in so
doing carries out review and approval of their financial reporting
and control procedures.
o Acts as the Conduct Review Committee for CIBC and for certain
regulated subsidiaries of CIBC.
o Monitors procedures established by the Board of Directors to
identify and resolve conflicts of interest and restrict the use of
confidential information as required by the Bank Act.
o Reviews procedures and practices with respect to self-dealing and
establishes criteria to measure materiality of such transactions.
Members: D.G. Bassett, P.M. Delbridge, W.L. Duke, I.E.H. Duvar (Chair), R.D.
Fullerton, G.D. Giffin
The Risk Management Committee ensures policy guidelines and systems exist and
are being followed to maintain credit, market and liquidity risks at an
acceptable level. The committee:
o Reviews and approves delegated authorities for credit and market
risks.
o Reviews and monitors CIBC's compliance with CDIC standards relating
to credit, market (including structural) and liquidity risk
management.
o Reviews and approves credits above certain threshold amounts and
reviews impaired loans and anticipated loan losses regularly.
o Reviews and recommends to the Board of Directors investment and
lending policies, standards and procedures.
Members: A.L. Flood, J.A. Grant (Chair), A.E.P. Hickman, W.D. McKeough, A.
Naimark
Information on the number of board and committee meetings held and director
attendance will be included in the Management Proxy Circular.
All committees are composed entirely of outside directors.
* W.A. Etherington, Lead Director, is an ex-officio member of the Management
Resources and Compensation Committee, the Audit Committee and the Risk
Management Committee.
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CIBC ANNUAL REPORT 2002