By Doug Alexander and Sean B. Pasternak

Feb. 2 (Bloomberg) — Royal Bank of Canada Chief Executive Officer Gordon Nixon agreed to forgo C$4.95 million ($4 million) in bonuses, more than half his total compensation, after profit fell for the first time in four years on debt writedowns.

Nixon was awarded about C$3.8 million in salary and a cash bonus after he forfeited stock options and deferred shares for 2008, according to a statement today by Toronto-based Royal Bank.

Nixon is the first Canadian bank executive to forgo a portion of his pay after combined profits at the country’s biggest lenders dropped 37 percent in the year ended Oct. 31. He joins Wall Street executives including Bank of America Corp. CEO Kenneth Lewis, Citigroup’s Vikram Pandit, Goldman Sachs Group Inc.’s Lloyd Blankfein and Morgan Stanley’s John Mack.

Nixon, 52, said his decision to forfeit C$2.75 million of deferred shares and C$2.2 million in 10-year stock options was “a personal one,” unrelated to Royal Bank’s performance, the bank said in a separate statement. Nixon also agreed to spend his C$2.4 million cash bonus to buy Royal Bank stock.

“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,” Nixon said in the statement.

Royal Bank’s annual profit fell 17 percent to C$4.56 billion on rising U.S. loan defaults and writedowns tied to the U.S. housing market and debt securities. The bank missed four of its five financial goals for 2008 after taking C$2.78 billion in pretax writedowns. The stock fell 42 percent over the last 12 months.

Scotiabank Pay

Scotiabank, Canada’s third-biggest bank, cut CEO Richard Waugh’s total compensation by 16 percent, the bank said today.

Waugh, 61, received C$8.68 million in salary, bonus, options and other compensation, down from C$10.3 million a year earlier. Waugh’s cash bonus was cut 69 percent to C$500,000. All figures exclude pension costs.

National Bank of Canada said it awarded CEO Louis Vachon C$4.92 million, a 23 percent increase from the year earlier. Bank of Montreal said Jan. 26 that CEO William Downe was awarded C$6.38 million in 2008, a 9.4 percent increase from a year earlier. Toronto-Dominion Bank, the second-largest lender, is expected to release its compensation report this month.

Canadian Imperial Bank of Commerce, the fifth-biggest bank, won’t determine 2008 total compensation for CEO Gerald McCaughey until the end of this fiscal year.

To contact the reporter on this story: Doug Alexander in Toronto at dalexander3@bloomberg.net; Sean B. Pasternak in Toronto at +1- spasternak@bloomberg.net

Last Updated: February 2, 2009 14:48 EST

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