Macquarie chief takes $7.6m pay hit as profits fall

Macquarie’s top executives have had their pay packets shrink this financial year. Chief executive Shemara Wikramanayake’s pay fell from $32.8 million to $25.2 million, as the commodities-fuelled bonanza cooled for the investment behemoth.

Former Macquarie rainmaker Nick O’Kane’s pay dropped from $57.6 million in 2023 to $1 million this year. O’Kane was not eligible for the hefty profit share bonuses doled out by Macquarie after he resigned in March. Asset management boss Ben Way also took a cut, taking home an $11.3 million packet.

On Friday, Macquarie reported a $3.5 billion full-year net profit, down 32 per cent on the previous year. Most of the profit was racked up in the six months to March. There was a 49 per cent increase from the first half to the second half of the year.

Macquarie chief executive Shemara Wikramanayake.Credit: Oscar Colman

Macquarie announced a final ordinary dividend of $3.85 a share, 40 per cent franked, down from $4.50 a share last year. Shares in the company were trading 1.6 per cent lower at $185 a share about 11.30am AEST.

The company’s flagship asset management business posted a 48 per cent slump in net profit of $1.2 billion in the financial year, weighed down by lower asset sales in its green investments.

Meanwhile, the commodities and global markets business – which was Macquarie’s golden child last year, benefiting from exceptionally volatile commodity prices – remains the biggest net profit contributor for the company. However, its net profit contribution of $3.2 billion for fiscal 2024 was still 47 per cent lower compared to the exceptional 2023 financial year.

“The overall result reflected substantially lower inventory management and trading income from a strong prior year in North American gas and power, and a decreased contribution from commodities risk management, primarily in [Europe, the Middle East and Africa] gas and power,” the company said.

Wikramanayake said while Macquarie was facing ongoing economic uncertainty and subdued market conditions across the world, the overall business remained resilient.

Macquarie’s banking and financial services arm, which contributed $1.2 billion in net profit in the period, up 3 per cent from the previous year, continues to growh.

The firm’s banking and financial services head, Greg Ward, was a notable exception to the pay packet slump. He took home $11.1 million compared to $10.7 million a year before on the back of strong growth in the bank’s lending arm.

Despite facing margin pressure in line with much of the broader banking sector, Macquarie has made considerable inroads into the Australian mortgage market. Macquarie’s home loan portfolio grew by 10 per cent over the year, pushing its market share to 5.3 per cent of the Australian market, and its business banking loan portfolio grew by 22 per cent.

Wikramanayake said that subject to market dynamics and margin pressure, she expected those portfolios to continue to grow.

She said she expected transaction activity and investment income to pick up for Macquarie Capital, which delivered a $1 billion net profit contribution, up 31 per cent from the previous year on the back of growth in its private credit portfolio.

“We’re expecting transaction activity to be significantly up on what has been challenging year,” Wikramanayake said.

Morningstar analyst Nathan Zaia said Macquarie’s profit fell short of his expectations.

“The bigger miss to our forecasts came from Macquarie Asset Management with profit tanking 48 per cent to $1.2 billion despite 7 per cent growth in assets under management,” he said. “Asset management fees were flat with fewer asset sales compared to last year.”

While Zaia said management’s short-term guidance suggested a return to earnings growth in the 2025 financial year, he said it was vague and contingent on market conditions.

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