Macquarie defends trader’s $1m a week salary amid protest vote

The bank has shrugged off the largest shareholder protest vote since 2007, saying commodities boss Nick O’Kane could get ‘multiples’ of his $57.6m pay package for his talent elsewhere.

Macquarie Group has defended the millionaire pay of commodities and markets boss Nick O’Kane, who raked in a $57.6m package for the firm’s 2023 financial year, saying he could easily get “multiples” of that elsewhere.

Facing shareholders that cast the largest protest vote against its remuneration plans in 16 years at its annual meeting, Macquarie said the massive pay package reflects the commodities and global markets division Mr O’Kane heads, had contributed the most to the jump in Macquarie’s profit to a record $5.18bn last year.

“He has grown the earnings in his time as group head almost four times and indeed spent 20 years building the business that delivered the bulk of those earnings,” chief executive Shemara Wikramanayake said.

“The market for talent like Nick is very strong, and there are many alternatives of where he could potentially earn multiples of what he does here. He’s very committed and chooses to work with us.”

The commodities and global markets division last year saw its annual net profit contribution surge by 54 per cent, helped by the turbulence in energy markets resulting from Russia’s war on Ukraine.

Mr O’Kane’s remuneration – as it is paid out over coming years – would reflect more than $1m a week in pay.

The company dubbed the Millionaires’ Factory does not have a “top-down” company organisation where people were paid to do what the CEO said. Instead, its long-held system was to “pay people for what they deliver,” Ms Wikramanayake said.

“It’s not just profit, but a range of factors,” she said. Those include non-financial factors such as risk management capacity, and business and people leadership, “and Nick performed strongly on all of those,” she said.

Asked if she had a problem with being paid less than Mr O’Kane, who over the past three years has earned $120m, she said that given the company’s strong remuneration frameworks, she was very supportive of the board’s pay decision.

Most investors voted in favour of its remuneration report at the meeting. However there was a protest “no” vote cast of about 20 per cent, after proxy adviser ISS recommended investors to vote against it.

That was the largest no vote against its remuneration package since 2007, when 21 per cent of investors voted against it, according to activist shareholder Stephen Mayne.

In its voting recommendations ISS said Ms O’Kane’s and Ms Wikramanayake’s pay was “excessive”

Ms Wikramanayake’s awarded pay for 2023 jumped to $32.8m, from $25.8m in the prior year. Within the total pay, however, her fixed salary is just $821,081.

“Investors generally disfavor an executive compensation framework that provides multiple executives with CEO-level compensation,” the report says. “In the case of Macquarie Group, Mr O‘Kane’s profit share alone significantly exceeds the total remuneration of CEOs at several global financial institutions that the company views as peers.”

Australian Shareholders Association director Susan Howes said many of its members had concerns about the remuneration practices of the investment banking and asset management conglomerate.

Macquarie chairman and former Reserve Bank governor Glenn Stevens said ISS had refused to meet to talk through its concerns with the remuneration report ahead of the meeting.

“We found it quite disappointing that unlike every other proxy firm and shareholder group ISS refused to meet with Macquarie despite five attempts to have a meeting with them,” he said.

“We do not share obviously their criticism of our room system. We believe it works very well for the company.”

“The structure has been in place for a long time (and) the outcomes that we’ve decided on this year are wholly consistent with that framework that we’ve had for a very long time.”

Originally published as Macquarie defends trader’s $1m a week salary amid protest vote