John Neal, the CEO of insurance giant QBE, lost $552,500 in bonuses after he was slow to inform his board of directors about a relationship with a staff member.
His short term incentive of $2.76 million was cut by 20% despite his performance being “well regarded” by the board of directors.
“However, both parties agree some recent personal decisions by the CEO have been inconsistent with the board’s expectations,” according to the company’s annual report released today.
The Australian Financial Review says Neal has a relationship with his personal assistant.
“Neal is being punished for not informing the board in a timely manner of the relationship, which is regarded as a conflict of interest under the company’s code of conduct for executives,” the newspaper reported.
The Australian says the woman, who has not been named, is is also the assistant to the board of QBE.
The news comes after recent revelations that Seven West Media CEO Tim Worner had an affair with a junior staff member.
According to that company’s board of directors, Worner was “disciplined” over the affair, which was “personal and consensual”, when details emerged two years ago. Details of the action against Worner have not released.
At QBE, a short term incentive of $2,762,646 would have been awarded to Neal based on the company’s performance and the board’s assessment of him against his balanced scorecard.
“The group CEO has had a commendable year and delivered a strong full year result for QBE,” the board said.
However, because of those “personal decisions”, his short term incentive was then cut by 20% to $2,210,117, or 50.2% of maximum opportunity.
His total pay for 2016 came in at $3.029 million.
An extract from the annual report:
The incentive to executives, other than the CEO, was 61.1% of the maximum opportunity.
QBE today posted a 23% increase in full year profit to $US844 million ($A1.098 billion) and announced a $A1 billion share buyback.
A short time ago, QBE shares were up 4.3% to $12.83.