TD Bank Financial Group has announced significant corporate governance enhancements to the long-term equity portion of its executive compensation package, including a reduction in the use and the term of stock options.

The bank says it will also reduce yearly cash bonuses, moving to long-term equity awards.

The bank is reducing the term of share options to seven years from 10, and said top executives now must give at least five days notice when they exercise options.

Senior executives also will be required to own shares worth at least six times their base salary, up from two or 2.5 times.

And the president and chief executive must own shares valued at 10 times base salary, up from five times. This share ownership will have to be maintained for two years after retirement.

The changes are effective immediately for the bank’s senior executive team.

“We firmly believe that the enhancements announced today create enduring value for shareholders by strengthening the long-term performance objectives for which our executives are accountable and aligning their interests with TDBFG’s strategy,” said Edmund Clark, TD president and CEO, in a news release.

The bank also outlined changes to its compensation of board members, saying per-meeting fees will be eliminated in favour of an annual fee, and directors will face an increased share-ownership requirement.