National Bank Management Proxy Circular now available

Montreal, 3 March 2011 - 

National Bank of Canada (TSX: NA) today announced that it has filed with securities regulators and is mailing to shareholders its Notice of Annual Meeting, to be held in Montreal on March 30, 2011, as well as its Management Proxy Circular. The Circular is available under Investor Relations at www.nbc.ca/circular

In accordance with the Board’s succession plan, three new director nominees are eligible to join the Board that is comprised of 15 directors. The nominees are Mr. Jean Houde, Mr. Pierre Thabet and Ms. Gillian H. Denham, who was appointed to the Board during this year and is up for election for the first time.

The Circular also contains detailed information on the Board’s Approach to compensation of the Bank’s executives for the fiscal year ended October 31, 2010. A summary of this approach is also available on the Bank’s website at www.nbc.ca/approach

Under the leadership of Louis Vachon, who was named President and Chief Executive Officer on June 1, 2007, the Bank’s financial performance has shown sustained growth, noted the Board. A chart in the Approach to compensation of the Bank’s executives shows that the Bank’s total shareholder return was significantly higher over the past three years than that of the five other major Canadian banks.

The Board is nevertheless very satisfied with the progress made by Mr. Vachon and his team in 2010. The initiatives and strategies implemented as part of the One client, one bank transformation are generating tangible results in the short term and favouring the Bank’s growth in the medium term, thereby ensuring its long-term sustainability.

“Despite the uncertainty surrounding the global financial system, it is reassuring to note that in 2010, the Bank increased its net income by 21% to a record high, and maintained the quality of its credit portfolio, as well as a solid Tier 1 capital level and liquidity profile,” underscored Jean Douville, Chairman of the Board.

The guiding principles adopted by the Board tie executive compensation to the Bank’s performance. More than 75% the target total direct compensation of the Named Executive Officers is variable and depends on the extent to which a combination of objectives are achieved.

Net income reached a record level in 2010 thus exceeding market expectations. However, the target set at the beginning of the year was higher. This explains why the total direct compensation (base salary plus variable compensation) granted by the Board to Louis Vachon was $5.2 million in 2010, compared to $5.6 million in 2009 when the objective had been exceeded. The $5.2 million includes $3.5 million which was awarded in the form of deferred compensation with a minimum three-year deferral period.

The Board will again put its approach to executive compensation to an advisory vote of its shareholders, after being one of the first Canadian companies to do so two years ago.

The Circular also contains information related to the Board of Directors and its committees, the election of directors and the appointment of auditors, as well as three proposals submitted by a shareholder, which the Bank recommends voting against.

About National Bank of Canada
National Bank of Canada is an integrated group that provides comprehensive financial services to consumers, small and medium-sized enterprises and large corporations in its core market, while offering specialized services to its clients elsewhere in the world. National Bank offers a full array of banking services, including retail, corporate and investment banking. It is an active player on international capital markets and, through its subsidiaries, is involved in securities brokerage, insurance and wealth management as well as mutual fund and retirement plan management. National Bank has over $152 billion in assets and, together with its subsidiaries, employs 18,407 people. The Bank’s securities are listed on the Toronto Stock Exchange (NA:TSX). For more information, visit the Bank’s website at www.nbc.ca. To access National Bank Financial Group’s financial education portal, visit
www.clearfacts.ca.

Information (The telephone number provided below is for the exclusive use of journalists and other media representatives.):

Claude Breton
Senior Manager – Public Affairs
National Bank Financial Group
Tel.: 514-394-8644