- The National Australia Bank (NAB) has announced it has chosen a new CEO, Royal Bank of Scotland’s Ross McEwan, who will take up the top job in April 2020.
- It comes after former CEO Andrew Thorburn stepped down after coming under increasing pressure during the financial services royal commission, along with outgoing chair Ken Henry.
- Current CEO Phillip Chronican will stay on in the interim, with Henry to depart alongisde him on McEwan’s arrival. There is no word yet on who will be appointed chair.
Of all the falls from grace during the banking royal commission, there were none as spectacular as what unfolded at National Australia Bank’s (NAB) top level.
A series of controversies, which included CEO Andrew Thorburn going on holiday right before the commission wrapped up and chair Ken Henry appearing dismissive of genuine criticism during a public hearing, saw the two ultimately fall on their swords. Both announced their departure from the bank after they were the only execs singled out in the Kenneth Hayne’s final report.
NAB consequently went into damage control, announcing a ‘global search’ for a new head that could repair the bank’s trashed brand. On Friday, more than five months after it began looking, NAB announced it had found its man, naming Ross McEwan as the incoming CEO of one of Australia’s biggest banks.
In doing so, he has managed to pip chief customer officer and former NSW premier Mike Baird for the role. It’s been suggested that Baird was short of experience, and could now instead be waiting in the wings to perhaps become McEwan’s successor.
Here’s what you need to know about Ross McEwan.
He helped turnaround one of the world’s biggest banks
A glance at McEwan’s career makes it clear why he was an obvious pick.
In 2012, when he took up the reins at what was once the largest bank in the world, the Royal Bank of Scotland (RBS), things were going south. It was headed for its fifth straight year of losses and was about to be smacked with a total of $27 billion in fines for its dubious-at-best behaviour leading up to the global financial crisis (GFC).
It was a job that no one really wanted. McEwan did, however, and must have grit his teeth as he managed to turn RBS’ fortunes around over the course of seven years to make it profitable. In 2018, it made a full-year profit of £1.6 billion, more than double what it made in 2017, and a long way from the performance he inherited years earlier.
He’ll now have to repeat his performance at NAB at what he called a “crucial time” for the bank.
“It is essential that I protect and accelerate the bank’s transformation program. The community also expects a higher level of accountability and transparency from the banking industry. Australians deserve NAB to be a world-class service provider,” he said in a media statement.
He could earn nearly $10 million a year
When you’re not being dragged through the coals during the royal commission, being the head of one of Australia’s big banks has its perks.
Take the pay-packet that McEwan is set to receive. He’ll be guaranteed a fixed salary of $2.5 million a year just for showing up. But that’s a pittance compared to what he could make in incentives.
He’ll be eligible for as much as 3.75 million extra if he hits his annual targets. Add an additional $3.25 million a year based on the long-term performance of the bank and suddenly McEwan could be paid an eye-watering $9.5 million a year all going well.
That’s not including potential dividends from his vesting rights, which could — depending on the bank’s share price — see McEwan sail past the $10 million mark.
That exceeds the already “excessive” $6.35 million pay packet that McEwan was set to receive earlier this year at RBS. Not a bad crust at all.
He used to work at one of NAB’s main competitors, but was snubbed for the CEO position
When McEwan joins NAB in April 2020, it won’t be the first Australian bank he’s worked at. He held one of the top jobs as group executive of retail banking at the Commonwealth Bank.
Leading the division, which handles all of the bank’s consumer operations, for five years, he was a frontrunner for the CEO job when former CEO Ralph Norris stepped down. Instead, Australia’s largest bank went with Ian Narev and McEwan got on a plane for Scotland.
Like a surprising number of Aussie bank bosses, Ross McEwan is actually from across the Tasman
Despite really making a name for himself at RBS — while sporting a quintessentially Scottish name to boot — McEwan is actually a Kiwi.
Born and raised in Hastings, near Hawke’s Bay on New Zealand’s North Island, McEwan went to both school and university across the ditch.
For a country of just 4.7 million people, New Zealanders have a surprising knack for becoming CEOs of Australia’s big banks.
NAB interim CEO Phillip Chronican for example, the man McEwan is bound to replace, hails from there as do both Norris and Narev, as well as ANZ CEO Shane Elliot.
He failed accounting at university — twice
McEwan’s stellar career hasn’t been without one or two failures. Other than falling short of becoming CBA’s CEO, he actually failed a core accounting subject at university not once, but twice.
In a 2000 interview with the Massey University alumni magazine, McEwan admitted numbers weren’t his strong suit.
“I’m more comfortable with people than with figures… It wasn’t a priority for me then. Now I’m in this role, it would have been nice, very nice, to have put more time into it,” he said.
Given his success at RBS, it’s safe to assume he’s a little more comfortable with the figures now. The personal touch won’t hurt either, given outgoing chair Ken Henry’s occasional lack of it.
His name came up during the royal commission (in a good way)
Being on the other side of the world and having not worked for an Australian bank for more than six years, didn’t keep McEwan from coming up in the royal commission.
During one public hearing, CBA CEO Matt Comyn who used to work alongside McEwan, mentioned the two had stayed in touch over the years.
The RBS CEO had even offered some advice to his old friend. He reportedly told Commyn to get the Commonwealth Bank to stop selling junk insurance — worthless policies that aren’t fit for their stated purpose — having encountered the same practice in Scotland.
In a now-infamous exchange, Commyn told the royal commission that he tried to convince his predecessor to cease the widespread practice. Narev reportedly responded by telling his understudy to “temper your sense of justice”.
In hindsight, perhaps McEwan would have made a better Commonwealth Bank CEO after all.
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