Breaking News

Australia's Macquarie bank faces shareholder backlash over pay

Stock MarketsJul 22, 2019 03:06AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

By Paulina Duran and Byron Kaye

SYDNEY (Reuters) - Australia's biggest retail shareholder group has asked investors to reject the executive pay plans of investment bank Macquarie Group (AX:MQG), accusing it of withholding pertinent information and setting overly achievable performance targets.

The Australian Shareholders Association (ASA) said the bank's remuneration report gives incomplete and confusing information about its "uncommon remuneration structure".

The ASA called on shareholders to reject the pay proposals at Macquarie's annual meeting on Thursday, and urged the bank to release the findings of an internal investigation into its governance and culture.

"The reason we are voting against it is the lack of transparency," ASA monitor Alan Goldin said by telephone.

Macquarie executives had met every performance hurdle for each of the previous five years, and "if you keep making a hurdle, it's not really a hurdle," Goldin added.

Under Australian law, if more than a quarter of a company's shareholders vote against its remuneration report for two years running, shareholders can call for a subsequent vote on whether to sack the entire board.

Australian banks are facing a new trend of heightened shareholder scrutiny after a public inquiry into the financial sector last year found widespread wrongdoing and serious flaws in the management of compliance and risk.

But until now Macquarie, which has posted record profits every year since 2013, has been spared the kind of pressure for greater transparency that shareholders have applied to Australia's four big retail banks.

A bone of contention for some advisers is the bank's decision to accelerate from 7 to 2 years the vesting period of deferred equity - worth about A$88 million ($61.9 million) - awarded to previous CEO Nicholas Moore.

Australia's biggest wealth manager, AMP Ltd (AX:AMP), and its biggest lenders - Commonwealth Bank of Australia (AX:CBA), Westpac Banking Corp (AX:WBC) and National Australia Bank (AX:NAB) - have had their remuneration reports voted down in recent years.

The ASA's hundreds of Macquarie shareholders represent less than a quarter of the bank's share register, limiting its chances of getting a successful "no" vote.

Proxy advisers Institutional Shareholders Services Inc, Glass Lewis and Co, and Ownership Matters, which vote on behalf of institutional investors at AGMs, said they had concerns about Macquarie's remuneration but would vote to approve them at the meeting.

Macquarie was among 32 major financial institutions told by the Australian Prudential (LON:PRU) Regulation Authority, the financial sector watchdog, last year to provide self-assessments of their risk-management strategies. It was one of just two major banks which declined to make the reports public.

The bank would not publish the governance report because it contained commercially sensitive information, a Macquarie spokeswoman said. She declined to comment on criticism about the bank's remuneration practices.

Australia's Macquarie bank faces shareholder backlash over pay

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
David Goh
David Goh Aug 02, 2019 3:55AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
It is time that Banks pay the top executives, Board of Directors & Executive Directors less in terms of remuneration so that shareholders can get more dividends.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email