Ralph Norris, who was succeeded as CEO of ASB's parent Commonwealth Bank of Australia (CBA) by fellow Kiwi Ian Narev last December, stands to receive A$9.6 million for his last five months leading the bank.
Narev, who stepped up from a role as CBA's group executive for business and private banking to take the helm from Norris, received remuneration of A$5.67 million for the June year, meaning the two men combined, could be paid A$15.27 million.
CBA's annual report doesn't detail the pay of ASB CEO Barbara Chapman.
CBA is Australasia's biggest bank with a market capitalisation about twice as big as the entire New Zealand stock exchange. Last week it posted record annual profit of A$7.1 billion.
News of Norris and Narev's June year pay comes as CBA implements a pay freeze for about 400 senior executives for the June 2013 year. This includes executives at ASB.
CBA says the freeze includes Narev and group executives. They won't receive increases to fixed pay, short-term incentive targets or long-term incentive targets.
Norris' pay for the five months of the 2012 year he was CBA's CEO exceeds the A$8.6 million he received for the full 2011 year and is equivalent to about A$63,000 per day.
It includes short-term bonus payments and long-term share-based awards scheduled to vest over the next couple of years with some based on customer satisfaction and total shareholder return. Narev's 2012 pay increased from A$2.68 million in 2011.
The Australian Prudential Regulation Authority, the prudential regulator of Australian banks, said in March bank executives' remuneration must not incorporate "risk time bombs" that could undermine the future viability of banks.
Furthermore, if executives wanted a bigger slice of the pie in good times, they must be prepared to share the pain in bad times. See more on this from APRA here.
25 Comments
63,000 a day is such a silly amount of money. It simply shows things that we already know, that the banking industry is not a competitive free market. It is more like cartel. The entire economy pays a great deal more than the 63,000 dollars a day that Norris received. His pay above that which could be considered reasonable for what is simply a job- no personal capital or life at risk, No star box office qualities ( Tom Cruise) nor observable performance above that of all others (Usain Bolt). The CEO is easily replaceable the job not particularly complicated. The skills and education required are far below that of a Surgeon. Even the IQ requirements would fall into the slightly above average range, nothing spectucular. So all we are left with is the fact that Banking is not operating in a free market and is not a competitive industry. It tries hard to suggest competition and markets with its advertising and comments etc but the fact is that it is not. People do not move, people cannot move, new entrants find it almost impossible. It is nothing like a free market and it is simply nt competitive.
When Mr Norris is lying on his death bed, about to meet his maker, he will realise that he's added nothing to the global community - in fact he's detracted from it - he's part of the problem.
He'll leave no legacy, will be remembered for nothing. Within a few years he'll be long forgotten. It's quite sad really. I continue to pray for Mr Norris.
That was not his doing. Alan Grrenspan and his acolyte Ben Bernanke are responsible for the banking bonanza if we are counting. By the way my Father's Air NZ shares crashed and never recovered the issue price - the certs sit laying around and hopefully go unnoticed.
Ah the cult of managerialism. Takes a certain type of person to rise to the top through all the internal politics of a large company. Nice wicket if you can stomach it though. Large salary for no personal risk except your reputation. Funnily enough millions of dollars are a great remedy for reputational damage. You even get a nice payoff if you get fired.
And on cue...
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10828420
Former Kaipara District Council chief executive Jack McKerchar received severance payments totalling $240,000 when he quit.
McKerchar, 61, was CEO when the council illegally struck rates and was also at the helm in the lead-up to an $80 million-plus debt blowout....
Leaving the council was the best decision he had ever made, he said.
"I'd stopped having fun. I now have my life back."
Agree with PlanB, it is excessive and it does not follow any personal risk/exposure with reward. However unfortunately it is a competitive world for bank CEO's, ANZ's CEO was rumoured to have been approached by Barclays. The market unfortunately sets the rate.
The problem is most of the banks are owned by other banks and other insurance funds all whom have a vested interests to increase each others board and ceo pay. They are too large, and not treatened with takeover, which would occur to companies whose managements get too fat
Conclusion - The major banks all need breaking up
PS - Norris has done well with CBA and did well with Air NZ. The guy is talented but grossly overpaid.
Agree except for the bit where there is a compettive market for bank CEOs There is no competitive market for CEOs full stop, Becaus eof the problem with the customers for CEOs
1. Purchases are very irregular in nature
2. Customers unsure of what they want
3. Customers unsure of what they are buying
4. Customers are spending other peoples money
I wonder if it has a lot to do with the cult like nature of managerialism, and the personification of events and environments making one person somehow representative of things greatly out of there control in most cases.
(Please noone mention Steve Jobs)
Hypertiger
Posted Today, 11:32 AM
It's a power struggleThe top are always supported by the bottom.
Those that start the war don't ever give up and are always on top.
An absolute capitalist power struggle.
Like animals choose in order to obtain power to to get what they want.
The result is the creation of massive amounts of poverty at the logical conclusion of the power struggle.
The system is doomed to implode once maximum potential is reached...
There is never a lasting victory over lies while the war against Truth has no exit strategy and always ends in defeat.
Basically absolute capitalists take more than the ygive...
So the winners of the absolute capitalist power struggle use what they have plundered from the losers to prop them up.
and call it philanthropy.
But eventually the bottom is sucked dry and collapses.
So it takes awhile for the revelation of Truth to show up.
And until the logical conclusion is reached.
Ignorance of Truth is considered blissful...or positive
Instead of evil or negative.
So then the damned spend eternity fighting to remain asleep to enjoy the dream they are awake...which ain't so bad according to the majority.
Dementia cases are symptoms of people that wake up after decades...then can't accept what they realized after what seems like eternity.
The quicker you wake up...the easier it is to accept.
As far as I can tell...
Mow down miners and then order them back to work...or else.
Imagine digging trenches by hand until your hands blister and your gloves hurt your hands...but the gloves kinda soaked up the blood...because when you took them off...it felt better...but now the pick axe is slipping out of your hands because it's covered with the blood from your hands...Which have cracked open.
And getting paid almost nothing so that the top can obatin the yield of power thy want to fight the war on deflation. http://forums.wallstreetexaminer.com/topic/1045518-poverty-in-america-w…
There is no way CEOs should be paid that sort of money. There are possibily some exceptions, like Steve Jobs for Apple, who really was 'apple', but I don't think he even paid himself much. I think if someone is easily replaceable, then they aren't worth the money.
Those sort of pay packets are obscene, and shows how out of touch they are. But it isn't just restricted to banks. My local council pays the CEO between 300-400k, and that is entirely ratepayer funded in a low wage area, which a population of around 40,000, and they have just cut back on free roadside recycling.
Ralph Norris is a recent addition to the Fonterra Board. For some reason he was sitting up in front of us shareholders as we watch and listened to Henry, John Wilson and Ian Brown ( on behalf of the out of touch shareholders council), justify TAF and the destruction of over 100 years of cooperative dairy development and the likelyhood of a gainful future for the industry. He didn't say a thing, the lack of animation was impressive, possibly only matched by his lack of understanding of and empathy for cooperatives and farmer shareholders.
He didn't say a thing, the lack of animation was impressive, possibly only matched by his lack of understanding of and empathy for cooperatives and farmer shareholders.
That's because he is an aviation/banking expert and has yet to earn his milking badge. Don't worry it's on it's way. Henry is on to it.
Quite likely Stephen. Maybe he did good things with CBA and AirNZ, but it was skill or just a period where ceos could do no wrong due to rapid growth? No doubt Ralphs corporate pedigree appeals to Henry, but I wonder what peso he places on cooperative principles and culture? I wonder if that 63k skill will result in a higher milk payout?
If the CBA consider Norris to be worth that much, its their call, and good luck to him. Banks are big businesses, always have been, and always will be whilst there are depositors and investors/savers that need to be put together with someone else taking the risk. If a board can get someone the same or better for a lesser cost, they no doubt would
Plan B - shareholders can replace the board the desire is there, hence, easily the CEO if that's whats required. They clearly havent seen the need because of CBA's performance - the question everyone should be asking is what value did Norris create ? none of us on here can probably answer that with any great knowledge, but the board probably can ?
Not much time I would guess! This seems to me to be the next step in the mad process of trying to turn Fonterra into a machine of capital rather than a functional co-op. What we need is people who understand why co-op's are successful business models in their own right, not some banker espousing outdated value rules. NZ has a rich history in really successful co-op enterprises, seems sad we have 'voted' to move back towards a structure that was inherent in the failures of 2008.
Agreed. My father said he read an article in the Waikato Times explaining a resurgence in cooperative banking models, in lieu of continuing financial crisis. It's a crying shame that the Fonterra leadership in conjunction with the NZ government has further undermined Fonterras cooperative structure in the quest for demutualisation, during the UN Year of the Cooperative. Although it is what 66% of the Fonterra milk solid supply wanted, it was probably less than what 50% of the shareholder membership wanted. Will the 63k man see merit in the cooperative model?
I've worked with a couple of high up management types, although they thought themselves pretty special the reality was quite differant. Both lacked judgement and genuine intelligence/problem solving ability IMHO. May be the exception, of course, but one had risen to managing director of one of our biggest companies yet made some apallingly stupid decisions in the time I worked with him. Just makes you wonder (A) how they choose these people and (B) why they find it necasssary to pay them outrageous salaries.
Look at Fletchers, invested in a US building products outfit right at the peak of the blow off top in their housing bubble, then went and did the same thing in Aussie a few years later. Slow learners or just plain dumb?
As for the big banks, each staff member, basic tellers included, is generating over a million in profit! It doesn't take a genius to flog mortgages on overpriced houses to dumb Kiwis and Aussies and, if you've got an actual licence to print money, who cares how much you pay the CEO.
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