NZ bank boss paid $5.9m but misses out on $5.2m more

Ian Narev, the New Zealander in charge of the beleaguered Commonwealth Bank of Australia, has missed out on nearly half of what he could have been paid this year.

Narev, who will retire by the end of next June, has led CBA to a series of record annual profits since taking charge in 2011 but has been under pressure since the financial intelligence agency Austrac accused the bank of breaching money-laundering and terrorism-financing laws.

He has already had his short-term bonus for the 2017 financial year slashed as a result of the scandal and chairwoman Catherine Livingstone said yesterday he would now retire before the end of the 2018 fiscal year.

“In discussions with Ian, we have . . . agreed it is important for the business that we deal with the speculation and questions about his tenure,” Livingstone said in a statement to the ASX.

Narev has missed out on nearly half of what he could have been paid this year.

He received total remuneration of A$5.5 million ($5.9m), CBA’s annual report revealed yesterday.

But the report also reveals how much pay the executives have had to forfeit.

CBA last week said its board still had full confidence in Narev but that short-term incentives for the CEO and his group executives would be cut to zero to demonstrate “collective accountability” for what the bank has said was an IT error.

Narev will forfeit A$4.83m ($5.2m) in previous years’ awards or lapsed awards.

That’s a big cut from last year when he was paid A$12.3m ($13.2m).

Six other named executives also forfeited awards for 2017.

Barbara Chapman, chief executive of New Zealand’s ASB bank, which is owned by CBA, isn’t named in the annual report because she is not classed as key management personal.

Chapman is in the group executive team but ASB has declined to answer questions about whether her bonus will be cut this year.

An ASB spokesman said last week: “Australian banks are required to comply with . . . the Corporations Act 2001 which stipulates the requirement for listed companies to disclose the remuneration of ‘key management personnel’ (KMP) in the annual report. CBA’s annual report sets out that its KMP are the non-executive directors, the CEO and the group executives which are listed in the remuneration report. Barbara Chapman is not included in this KMP group and therefore her remuneration details are not required to be disclosed.”