ANZ 2.53% $18.68 australia and new zealand banking group limited

anz chief's mike smith's $13m in a year to for

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    From Herald Sun...

    THE public controversy over executive pay at Australia's big banks is to intensify with ANZ chief Mike Smith emerging as the country's highest-paid bank boss.

    Mr Smith collected a cool $12.96 million in the 12 months to the end of September despite the fact that ANZ posted a 20 per cent fall in net profit.

    His pay is more than $4 million above Westpac chief Gail Kelly and CBA boss Ralph Norris, both of whom managed to boost annual earnings at their banks last year.

    The big component of Mr Smith's pay, which tipped his package into eight figures, was a $5.1 million sign-on fee when he joined ANZ from HSBC last year.

    Mr Smith is due to receive another $4 million worth of sign-on compensation over the next two years.

    Outgoing National Australia Bank chief John Stewart was the only major bank boss to cop a pay cut.

    While NAB shareholders paid a big price following the $1.1 billion of writedowns on US debt securities, Mr Stewart's pay was cut by only $305,000 to $8.5 million.

    Details of the pay packages of Mr Smith and Mr Stewart were announced to the market yesterday as St George chief executive Paul Fegan said he would be leaving the bank following the merger with Westpac.

    Mr Fegan, who was paid $4.25 million in the 12 months to the end of September, will receive $2 million in cash and other entitlements when he vacates the role on December 8.

    Mr Smith's big salary could get even bigger in the next three years if ANZ shareholders at the annual meeting in Brisbane on December 18 approve a board resolution to grant 700,000 options to him.

    Following the recent controversy over the tenure of ANZ chairman Charles Goode, the board has also decided to cap the tenure of directors at about 10 years.

    Mr Goode has been ANZ chairman since 1995, but the new rule will not apply to him when he seeks re-election to the board at this year's AGM.

    A group of institutional investors have already signalled their opposition to the reappointment.

    Last week Mr Goode signalled he would step down from the board in the middle of next year when his successor, Sir Rod Eddington, will become a director.

    NAB will also have to deal with hostile shareholders at its AGM in Melbourne next month over its governance policies.

    In a statement attached to the notice paper for the meeting, the NAB board has hit out at the move by the Australian Shareholders' Association to remove non-executive director Paul Rizzo as a director.

    The ASA is pushing to oust Mr Rizzo, claiming he should be brought to account for the recent $1.1 billion writedown of the bank's US debt securities portfolio.

    ASA chairman John Curry said that Mr Rizzo should be removed because - in his role as chairman of the board's risk committee - he was responsible for ensuring the investments truly reflected the "AAA" rating assigned to them by ratings agency Standard & Poor's.

    The feud over accountability for the big writedown has once again focused shareholders' attention on the group's troubled risk management record. NAB has written off more than $7 billion of assets in the past decade.

    "It seems to us that someone should put their hand up and accept responsibility," said ASA chairman John Curry.

    "It is not good enough just to rely on the assumptions of the ratings agencies, as NAB did in this case."

    The NAB board is recommending that shareholders reject the ASA's motion to remove Mr Rizzo, stating in the AGM notice papers that he has made an "invaluable contribution" to the board.

    In the notice papers, the NAB board expresses "regret" for the writedown, but defends Mr Rizzo's role.

    "Mr Rizzo has contributed significantly to the ongoing improvement in the company's risk management procedures since his appointment to the board in 2004," the NAB directors stated.

    "The proposal by the ASA that Mr Rizzo should be held personally accountable for these circumstances is therefore firmly rejected by the board and management of the company."

    NAB shareholders will also be asked to vote on fresh options packages earmarked for incoming managing director Cameron Clyne and veteran executives Michael Ullmer and Ahmed Fahour.


 
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