Bil­lion-dol­lar bank bosses

The Sunday Telegraph (Sydney) - - NEWS - ANNIKA SMETHURST NA­TIONAL PO­LIT­I­CAL EDI­TOR

THE big five banks tar­geted in the Turn­bull gov­ern­ment’s fi­nan­cial sec­tor crack­down paid se­nior ex­ec­u­tives more than $1.2 bil­lion in wages and bonuses in the past five years, new data has re­vealed.

In a move which will fur­ther sour the re­la­tion­ship be­tween the banks and Can­berra, se­nior ex­ec­u­tives at the big banks will be li­censed by the fi­nan­cial reg­u­la­tor APRA and could be sacked or lose their bonus if they mis­be­have.

Bank bosses at the Com­mon­wealth Bank, West­pac, Na­tional Aus­tralia Bank, ANZ and Mac­quarie will have their wages mon­i­tored and lu­cra­tive bonuses will be frozen un­der a rad­i­cal new plan an­nounced on Bud­get night.

A new anal­y­sis pro­vided to The Sun­day Tele­graph re­veals the five banks in the fir­ing line spent more than $1 bil­lion on their top di­rec­tors and ex­ec­u­tives in the past five years, in­clud­ing more than $284 mil- lion in fis­cal year 2015-16. Mac­quarie Bank topped the list, pay­ing a whop­ping $456 mil­lion to its se­nior ex­ec­u­tives over the past five years. The bank’s boss Ni­cholas Moore is the high­est-paid bank­ing boss in Aus­tralia with a pay packet of more than $18 mil­lion.

Com­mon­wealth Bank was the sec­ond-big­gest spender on se­nior staff, fork­ing out more than $2177 mil­lion to ex­ec­u­tives.es.

Bank boss­eses at West­pac shared more than $216 mil­lion in the past five years; more than $191 1 went to se­nior or staff at ANZ and $153 mil­lion at NAB.

Un­der the new regime, ex­ec­u­tives will have 40 per cent of their vari­able pay — and 60 per cent for chief ex­ec­u­tives — de­ferred for four years to en­sure banks are mak­ing long-term de­ci­sions.

Aus­tralian In­sti­tute of Com­pany Di­rec­tors gen­eral man­ager ad­vo­cacy Louise Petschler slammed the move as an “in­tru­sive reg­u­la­tory ap­proach with un­prece­dented gov­ern­ment pow­ers to mon­i­tor re­cruit­ment and pay.

“Ex­ten­sive con­sul­ta­tion will be re­quired with the in­dus­try to avoid un­in­tended con­se­quences,” Ms Petschler said.

Trea­surer Scott Mor­ri­son said its Bank­ing Ex­ec­u­tive Ac­count­abil­ity Regime will en­sure banks and their ex­ecu ex­ec­u­tives are held acca ac­count­able when th they fail to meet ex­pec­ta­tions.

“Bank ex­ec­u­tives in key roles will have to be regis­tered and if they muck u up they’ll be der dereg­is­tered,” Mr Mor­ris Mor­ri­son said. “That means they can’t carry their prob­lems to an­other bank and their bonuses can be pulled back. This is all mod­elled on a sim­i­lar sys­tem that has been work­ing prop­erly in the UK.”

The pop­ulist move fol­lows a se­ries of scan­dals in­volv­ing the banks and La­bor’s push for an elec­torally pop­u­lar royal com­mis­sion into the sec­tor.

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