Westpac chief Brian Hartzer was paid $6.7 million last financial year, his first full year in the job running Australia’s second largest bank, its annual report showed.
The pay packet, which compared with $5.7 million in statutory remuneration for 2015, came as the bank’s most senior executives missed out on some long-term bonuses because targets for shareholder returns were not hit.
In the year to September, Westpac’s top 12 executives were paid total remuneration packages worth a combined $38 million, an average of several million dollars per executive.
Mr Hartzer was the highest-paid, followed by deputy chief executive Phil Coffey on $3.6 million, and the head of consumer banking George Frazis on $3.5 million.
The figures reflect a statutory measure of remuneration, which includes the value of share bonuses that have not yet vested.
The executives’ pay is for a year in which Westpac’s profit stalled at $7.8 billion amid rising bad debt costs and a move towards tougher capital rules.
Mr Hartzer’s pay is about 80 times the Australian average full-time wage of $81,900.
Even so, it is less than the more than $10 million in pay received by his predecessor Gail Kelly in her final years in the job. When Mr Hartzer was appointed in late 2014, Westpac chairman Lindsay Maxsted conceded pay in banking had become so high it was “out of kilter” with the expectations of investors and the community.
Earlier this week, ANZ Bank said its chief executive Shayne Elliott was paid $5.07 million in the year to September, also significantly less than his predecessor Mike Smith. The total pay pool for ANZ executives was also $10 million smaller in the year.
Commonwealth Bank chief Ian Narev is the highest paid Big Four boss, receiving $12.3 million last year including bonuses from prior years.
Westpac’s report said none of the long-term incentives for the bank’s performance between 2013 and 2016 had vested in the year because targets were not met. In the last three years, it said Westpac shareholders made total returns of 15.2 per cent including dividends and share price changes.
“While we ranked second amongst the four major Australian banks over the performance period, this outcome was below the 50th percentile vesting threshold so none of the 2013 TSR [total shareholder returns] hurdled rights vested,” the report said.
Growth in Westpac’s earnings per share was also below the target of 4 per cent a year over the last three years.
Separate figures on the actual amount of pay received by top executives – including shares that vested from prior years – showed Mr Hartzer’s pay was $5.1 million, Mr Coffey’s was $3.3 million and Mr Frazis received $3.1 million.