Big salaries vital, MacBank tells shareholders
January 17, 2008
It's very rare to make a front page but on mentioning The Australian getting sued by Macquarie Bank, the paper reciprocated with this Glenda Korporaal story after the millionaire factory's 2007 AGM.
Macquarie Bank has defied a growing shareholder outcry over its executive remuneration packages, which could see chief executive Allan Moss's pay soar past $35 million this year.
Chairman David Clarke warned that axing the lavish remuneration package would "blow up the bank'' as senior executives could be poached by other organisations.
Mr Clarke made it clear yesterday the bank was sticking to its hyper-performance-related executive reward structure, despite criticisms by some shareholders and corporate advisory group Institutional Shareholder Services.
Investors holding more than 30 million Macquarie Bank shares – worth more than $2.7billion – voted against the bank's remuneration report at a 3 1/2-hour annual meeting yesterday.
Macquarie executives confirmed the bank could be set for another record year with first-quarter earnings up "substantially'' on last year's record.
While the vote is not binding on the company, the fact that more than 20 per cent of shareholders who voted opposed the bank's remuneration policy was seen as significant by the Australian Shareholders Association.
Mr Moss is already Australia's highest-paid chief executive, taking home more than $33 million last year compared with $21million the year before, after the bank reported a 60 per cent rise in net profits to $1.46 billion.
Another substantial rise in the bank's profits this year – with some analysts expecting earnings to reach as much as $1.8 billion – could be expected to see further jumps in executive payment packages for the year.
Macquarie's head of investment banking, Nicholas Moore, took home almost $33 million last year while Mr Clarke received $19million.
The annual meeting saw several shareholders speak out strongly against the bank's generous payments to senior executives. "It is becoming almost the music hall joke that Macquarie's salaries are becoming stratospheric,'' said one shareholder.
"There is a broad perception that the salaries paid by Macquarie Bank are outrageous,'' said another. Asked by Crikey founder Stephen Mayne why the bank was continuing its defamation action against The Australian over a report about the Beaconsfield goldmine in Tasmania, Mr Clarke said the defamation action remained in progress.
Another shareholder speculated about what it must be like to see $1 million a month going into his bank account. "How many yachts could I have?'' he said. He and several other shareholders unsuccessfully asked for a show of hands to allow them to express their feelings about the bank's remuneration policy.
Mr Clarke said Macquarie's remuneration policy was a key part of the bank's success. Its share price has risen from just under $60 a year ago to yesterday's close of $91.74.
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