Royal Bank of Canada's chief executive officer is slashing his own pay — in addition to the board's 30 per cent reduction in his cash compensation for 2008 — after the annual profit of Canada's largest bank sagged 17 per cent.

RBC's annual disclosure shows CEO Gord Nixon's base salary was unchanged at $1.4 million, while his bonus was reduced to $2.4 million, down from $4 million in 2007 and $5 million in 2006.

However, Nixon plans to invest this $2.4 million in stock of the bank.

And the bank said Monday he has made a "personal decision" to voluntarily forfeit his 2008 mid-term and long-term compensation — $2.75 million in restricted shares, unchanged from last year, and 247,000 10-year stock options with a deemed value of $2.2 million.

"I am proud of the accomplishments and the performance of RBC, especially relative to our global peers, but in light of the current state of global markets and the challenges faced by so many in Canada and around the world, I feel this decision is right for both me and the bank," stated Nixon, who also received "other" compensation of $674,000.

In choosing to invest his cash bonus in Royal Bank stock, he said RBC will prosper as the global economy turns around, and "as its CEO and a significant shareholder, I would benefit from any recovery."

The grand total granted to him by the bank for 2008 was $7,224,359, excluding the hard-to-value stock options, off 18 per cent from $8,767,229 in 2007.

This wasn't RBC's biggest pay package. That honour went to Chuck Winograd, who retired at the end of the banking year on Oct. 31 as group head of capital markets.

Winograd's final year on the job reaped a salary of $400,000, a $5-million bonus and $1.875 million in restricted shares, plus other compensation of $1.87 million, for a total of $9.15 million, plus options on 169,000 shares.

The compensation packages came in a year when RBC's earnings eroded 17 per cent to $4.56 billion as revenue declined four per cent to $21.58 billion.

Return on equity, a key measure of banking performance, sagged to 18 per cent from the prior year's lavish 24.6 per cent.

Bank of Montreal (TSX:BMO) disclosed last week that its chief executive, Bill Downe, received just under $6 million in direct compensation last year, up from $5.5 million in 2007.

Downe's bonus was restored to $1.4 million as BMO "performed well in challenging times." Earnings declined seven per cent to $1.98 billion, but revenue increased nine per cent to $10.21 billion.

Downe received a 2008 base salary of $1,032,000, up seven per cent from $964,245 in 2007.

The $1.4-million cash bonus was up from nil in 2007, and Downe's share issues and stock options were valued at $3.6 million, along with other compensation of $401,000.