The fallout from the CBA’s money laundering scandal continues, with the CBA board agreeing to slash short-term bonuses for CEO Ian Narev and 11 of his executives, and the board also cutting director fees by 20%. From The ABC:
Chief executive Ian Narev and his fellow senior executives will lose all of their short-term variable bonuses for the financial year just ended.
The board did not absolve itself from any responsibility for the scandal, cutting its own non-executive director fees by 20 per cent for the current financial year.In the 2016 financial year, all of the directors who served the full year were paid above $300,000, except one who fell just short at $273,000. Then chairman David Turner was paid $874,000.
For Mr Narev, it looks likely to be around a 20 per cent pay cut based on last year’s figures — in financial year 2016, he received $2.8 million in short-term variable pay out of a total pay packet of $12.3 million, which included some long-term bonuses from earlier years that vested that year.
Ian Narev’s “statutory” pay for financial year 2016 was listed at just shy of $8.8 million.
Full details of the bank’s 2017 executive and director remuneration will be released in its annual report next week…
However, it appears that Mr Narev will keep his top job at the bank, with the CBA’s chairman Catherine Livingstone saying, “Mr Narev retains the full confidence of the board.”
So Narev will keep his job and still rake in nearly $9 million? Nice work if you can get it. And hardly a major disincentive to eradicate rogue behaviour.
As noted by Adam Creighton yesterday:
The allegations against the Commonwealth Bank by federal authorities for turning a blind eye or at best dragging the chain on what appear to have been systematic cases of money laundering, suggest a mix of extraordinary negligence, incompetence, even arrogance among senior management at Australia’s biggest company…
This latest CBA scandal highlights the dysfunctional incentives and governance problems that emerge naturally in massive corporations…
If we want executives’ behaviour to improve, penalties for poor behaviour need to fall on them.
Exactly. The CBA board has to do much better than this if it wants to regain the trust of shareholders and the community.
