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NAB chief Andrew Thorburn takes a $2.1 million pay cut ahead of royal commission grilling



Posted

November 16, 2018 11:55:45

National Australia Bank chief executive Andrew Thorburn has copped a $2.1 million pay cut as a result of the fallout and potential criminal misconduct emerging from the financial services royal commission.

Key points:

  • NAB cited a failure to quickly fix mistakes highlighted at the royal commission as partly behind the cut
  • The board also pointed to “control issues” and policy breaches in the CEO’s office in the decision
  • Staff bonuses across NAB were also cut by $114 million

While the haircut is the biggest of any major bank chief executive, Mr Thorburn still made $4.3 million in the year to September 2018, down from $6.4 million in the prior corresponding period.

The penalty comes as chief executives including Mr Thorburn prepare to face an intense grilling at the royal commission, which begins its final round of hearings on Monday.

In its remuneration report released this morning, the NAB board considered Mr Thorburn to have “performed strongly” in a difficult environment.

However, the board signalled factors including some stemming from the royal commission meant that Mr Thorburn could not be rewarded at the top of the bonus range.

“The group CEO has accepted accountability for NAB’s failure to fix mistakes quickly, remediate customers promptly and set things right,” the remuneration report said.

“These failures have impacted NAB’s reputation.”

‘Policy breaches and control failings’ in CEO office

The renumeration report also pointed to an investigation into an alleged fraud involving a former employee, without naming Mr Thorburn’s former chief of staff Rosemary Rogers.

“These [matters] include 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,” the report said.

“These matters have been resolved and closed to the Board’s satisfaction.”

In addition to Mr Thorburn’s pay pain, bonuses across the National Australia Bank were reduced by $114 million as commissioner Kenneth Hayne weighed admissions and evidence that part of the financial sector put the interests of shareholders ahead of customers.

Mr Thorburn’s pay reduction means he is no longer the highest-paid NAB executive, with chief technology officer Patrick Wright earning $4.4 million.

Former NSW Liberal premier Mike Baird, now NAB’s chief customer officer, earned $2.6 million in his first year at the bank.

NAB shares were 0.6 per cent lower at $23.72 after the release of the renumeration report at 10:47am (AEST).

Follow Peter Ryan on Twitter @peter_f_ryan

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