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March 12 (Reuters) - TD Bank TD.TO Chief Executive Officer Bharat Masrani received a compensation cut of about 11% to C$13.4 million ($9.93 million) in 2023, a year marred by the bank's termination of its First Horizon FHN.N acquisition and U.S. regulatory issues.

"The board believes that the CEO demonstrated excellent personal leadership and performance through a challenging year. However, in acknowledgement of the termination of the First Horizon transaction and certain U.S. regulatory issues, the CEO recommended, and the board approved, the $1 million reduction in compensation," TD Bank said in a regulatory filing on Tuesday.

The board made no change to the CEO's total direct compensation target for 2024.

Masrani, who also headed TD's U.S. operations before taking the CEO role, is behind the bank's ambitious U.S. expansion strategy as it looks for growth opportunities outside of home.

The $13 billion First Horizon deal, which would have given TD access to 12 states across the Southeast U.S., was called off after a long wait for regulatory approvals last year.

The bank shortly afterwards said it was being probed by the U.S. Justice Department about its compliance with anti-money-laundering rules.

Masrani is also the fourth Canadian bank CEO to miss 2023 bonus targets.

Of the big five Canadian banks, Royal Bank of Canada RY.TOchief Dave McKay was the only CEO to exceed his targets, making him the highest-paid bank CEO in the country.

In fiscal 2022, Masrani's total compensation jumped 11.7% and made him the highest-paid big five Canadian bank CEO after RBC's McKay.

($1 = 1.3492 Canadian dollars)

(Reporting by Jaiveer Singh Shekhawat in Bengaluru and Nivedita Balu in Toronto; Editing by Krishna Chandra Eluri and Sandra Maler)

((JaiveerSingh.Shekhawat@thomsonreuters.com;))

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