Banks told to lift veil on exec pay wizardry
THE big banks and other finance companies have been asked to explain their executive pay policies to the financial services royal commission.
Letters have gone out to the nation’s biggest lenders and other companies asking how some of the best-paid people in Australia have their pay structured, Business Daily believes.
The royal commission has asked for explanations as to how complex parts of executive pay packages — including short and long-term bonuses — fit together.
It is also believed to have sought more details on commissions paid to mortgage bro- kers and other perks lavished on people in the industry.
The final round of public hearings begins on November 19. Bosses from the nation’s major banks are expected to be called to appear.
ANZ chief Shayne Elliott yesterday said the bank’s top brass would take a hit following the wide-ranging revelations at the royal commission.
Appearing at a federal parliamentary inquiry, Mr Elliott said “failings acknowledged to the commission and the lack of satisfactory progress on reme- diation will have a material impact on executive remuneration this year”.
Mr Elliott said he was “appalled” by the behaviour of some ANZ staff.
As chief executive for the past two years, he said he was “ultimately accountable for this”.
“It is completely unacceptable that we have caused financial harm and emotional stress to our customers,” he said.
Mr Elliott said the bank had failed to hold people accountable for poor conduct.
But he said there had been reforms aimed at ensuring ex-
ecutives knew what they were liable for.
He acknowledged ANZ had broken the trust of many customers.
Mr Elliott said the bank was working to improve its systems to repay customers when they were wronged.
It now has a team of 165 people working to fix past misconduct.
He said profits were “dramatically lower” than at any time in the past decade, but added he did not know if this was due to the commission.
“We have been punished,” he told the House of Representatives economics commit- tee inquiry into the big four banks.
“The reality is that the sector, including ANZ, our return on equity has fallen from 17-18 per cent to 11.”
Mr Elliott said competition was more intense than in previous years and non-bank players were increasingly winning market share faster than the major lenders.
His appearance came after Commonwealth Bank chief Matt Comyn and Westpac chief Brian Hartzer fronted the committee on Thursday.
Mr Comyn said the CBA should have better protected customers instead of protect- ing commissions for financial advisers.
Mr Hartzer said his bank had also not handled the introduction of Future of Financial Advice reforms — back in 2014 — as it should have.
National Australia Bank chief Andrew Thorburn will appear at the third day of the inquiry, next Friday.
The hearings come two weeks after banking royal commissioner Kenneth Hayne delivered an interim report blaming greed and the pursuit of profit for widespread misconduct in the banking and financial services industry.