NAB 0.68% $31.07 national australia bank limited

cicutto earns $21,000 per day !!!

  1. 5,823 Posts.
    Hmmm ... "If I were Frank Cicutto, I would consider myself an optimist if I were to iron five shirts for next week" ....

    Cicutto's future attracting bets...
    22jan04 (Advertiser)

    FRANK Cicutto's multimillion-dollar, three-year contract might not be enough to save the National Australia Bank chief executive after the latest debacle to hit the bank.

    While the board of Australia's largest bank stands by its embattled leader, losses of up to $600 million from unauthorised foreign-exchange trading have others gambling on his future.

    In NAB's Sydney offices, elements of senior management are said to be running a book to see who can pick the value Mr Cicutto's departure would add to NAB's ailing share price.

    Since last week's disclosure that four rogue NAB currency traders allegedly had cost the bank at least $180 million, more than $2 billion has been wiped from the value of NAB shares.

    IMB Matrix Asset Management managing director Brian Ingham said NAB has rolled from one disaster to another in the past few years – with Mr Cicutto at the helm.

    "If I were Frank Cicutto, I would consider myself an optimist if I were to iron five shirts for the next week," Mr Ingham said.

    Problems had included South Korean frauds costing $80 million, the US HomeSide debacle which cost NAB $4 billion and software cost blowouts.

    Last week, NAB chairman Charles Allen said Mr Cicutto had the full support of the board and the bank has since repeated that line.

    However, analysts have their doubts and there is speculation over a possible successor to Australia's highest-paid retail banker.

    In 2002-03 Mr Cicutto was paid $7.7 million including bonuses, or more than $21,000 a day.

    Among those being talked of as a possible replacement for Mr Cicutto is the head of NAB's wealth-management business, Peter Scott.

    JP Morgan bank analyst Brian Johnson has compiled a list he calls "The 15 Evil Sins of NAB" which, as well as the blunders outlined by Mr Ingham, includes issues such as the MLC $60 million investor compensation, Mr Cicutto's contract renewal, a failed raid on AMP shares and the risk of further trading losses.

    Mr Johnson believes the forex affair has pushed aside, for now at least, any NAB plans for an AMP takeover.

    He said the latest loss suggests NAB had learned little in the way of tightening up operating risk following the HomeSide write-downs.

    Mr Cicutto agreed to a new employment contract with NAB on October 27 last year, with an annual base salary of $2.082 million. However, the contract includes the opportunity to more than double that if he clears all short-term performance hurdles.

    He also stands to gain another $4 million worth of options each year under a long-term incentive plan.

    Meanwhile, in NAB's Sydney offices there is talk of one employee punting on a Cicutto departure adding $3 to NAB's share price.

    Based on the more than 1.5 billion shares NAB has scattered around the marketplace, that means Mr Cicutto would be worth more than $4.5 billion to shareholders should he step out of the office for good.

    Cheers ... tight stops.

    This is only my view ... read the red stuff.

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