- The NAB released its annual report, showing its CEO’s pay was $2 million less in 2018 than the previous year.
- Andrew Thorburn was paid $4,375,511.
- The big four banks have been winding back executive pay packages following revelations of misconduct in the financial services royal commission.
NAB chief executive Andrew Thorburn was paid $4,375,511 last financial year, a drop of more than $2 million as the bank cuts back on executive pay in response to revelations in the financial services royal commission.
Thorburn’s pay equates to an almost one-third cut. Overall, bonuses were cut across the NAB by $114 million from target.
“The Group CEO has accepted accountability for NAB’s failure to fix mistakes quickly, remediate customers promptly and set things right,” says the bank’s annual report.
“These failures have impacted NAB’s reputation.”
The report also referred to a Fiji holiday taken by Thorburn which was arranged through a company under police investigation over accusations it bribed to win contracts from the bank.
“In addition, certain matters emerged in the course of an investigation into an alleged fraud on NAB by a former employee and supplier to NAB,” the annual report says.
“These included certain control failings and breaches of policy in the Office of the CEO, and a small number of unintended breaches of policy by the Group CEO. These matters have been resolved and closed to the Board’s satisfaction.”
Thorburn also gets no increase in his fixed pay this year, according to the NAB annual report released today. Directors also won’t see their fees rise.
Here is Thorburn’s 2018 pay compared to the previous year:
The big four banks have been winding back executive pay packages following the financial services royal commission.
Westpac earlier this month announced bonuses for its senior executives were down by 25% on average, acknowledging that shareholders have seen their holdings fall in value.
At the Commonwealth, both executive bonuses and fees to directors have been reduced, resulting in a $100 million cut in remuneration.
At the NAB, the following graph shows the CEO’s target total pay from 2016 to 2018 and his actual remuneration for 2018:
The NAB’s remuneration report says traditional incentive schemes have contributed to a focus on short-term, financial outcomes in the financial services sector.
“This does not best serve the interests of customers, shareholders or NAB itself,” says Anne Loveridge, Remuneration Committee Chairman.
Loveridge says a new executive remuneration framework encourages long-term decision making and drives performance that represents the interests of all NAB stakeholders.
Performance assessment at the bank now have compulsory customer and risk measures.
Thorburn and NAB Chairman Ken Henry, a former Treasury Secretary, are due to appear in the royal commission during the seventh round of hearings, looking at the causes of misconduct and on possible regulatory reform, starting next week.