Banking royal commission: NAB’s Andrew Hagger departs with redundancy payout

Andrew Hagger, the bank inquiry's biggest scalp so far, will leave NAB with a redundancy sum of up to $796,000.

NAB’s Andrew Hagger leaves the royal commission hearings last month. Pic: AAP

NAB’s head of wealth Andrew Hagger will pocket a redundancy payout of up to $796,000 after he today became highest-profile casualty so far of the financial services royal commission.

However the fate of millions of dollars in bonuses and shares held by the banking executive remains unclear.

Mr Hagger today fell on his sword and announced he would leave NAB following his bruising appearance before the Hayne inquiry last month.

Mr Hagger, who was previously touted as a potential future NAB chief executive, was at one stage said by royal commission counsel assisting Michael Hodge, QC, to have shown a “a disrespect for the role of the regulator and a disregard for the gravity of the events in question”.

“I take accountability for what has occurred on my watch, and accept that alongside successes were failures, including instances where we did not act with the pace required,” Mr Hagger, who leaves the bank after 10 years, said today.

“I leave NAB with confidence that we are creating a better bank.”

Mr Hagger is entitled to 35.9 weeks of pay at his base rate of $1,154,125 a year, the bank’s enterprise bargaining agreement and annual report show.

Last year he also earned a cash bonus of $480,000 and was granted shares and options worth $1.7m, the 2017 annual report shows.

A NAB spokeswoman declined to answer questions about Mr Hagger’s 2018 bonus and whether there would be any clawback of prior year cash and share-based awards.

Details of his current year remuneration are to be revealed in NAB’s annual report, due on November 16.

Mr Hagger, who in 2016 bought himself a Maserati, has benefited from skyrocketing pay even as the bank’s fees-for-no-service scandal unfolded.

Last year, he received a 36 per cent pay rise, following revelations by the corporate regulator that the bank had incorrectly charged superannuation customers $34.7m for services they never received.

However, during commission hearings last week it emerged Mr Hagger failed to tell the Australian Securities and Investments Commission of a far larger updated figure during a phone call with commissioner Greg Tanzer in October 2016.

During his evidence, Mr Hagger insisted he did not mislead Mr Tanzer, saying he left a “very open door” to the regulator asking him for an updated number.

“We submit that Mr Hagger’s description of the call as ‘open and transparent’ is not accurate,” Mr Hodge said in his closing submissions.

NAB rejected this conclusion in its submissions.

“With the recent bringing together of the wealth businesses under new MLC CEO Geoff Lloyd to prepare for separation from NAB, Andrew Hagger believes now is the right time to leave,” chief executive Andrew Thorburn said.

“We have been colleagues for a decade at NAB, I have valued his long-term contribution and I wish him and his family well as he pursues new opportunities.”

Mr Hagger’s departure, set for October 1, is among a number of executive changes announced by NAB this morning as it attempts to rebuild a reputation damaged by misconduct revealed at the commission hearings.

The bank’s customer products and services division is to be rebadged “customer experience”, and headed by executive general manager of deposits and transactions Rachel Slade.

Former NSW premier Mike Baird will move from chief customer officer, corporate and institutional, to the same role at consumer banking.

He will be replaced in his old job by former chief risk officer David Gall.

Group treasurer Shaul Dooley will become chief risk officer.

Former NSW premier Mike Baird. Pic: Aaron Francis

“Rachel, Mike, David and Shaun are outstanding leaders who think customers first and bring terrific authenticity and values to NAB every day,” Mr Thorburn said.

“These appointments also demonstrate the depth of talent we have inside NAB and I am particularly delighted to promote Rachel and Shaun to the executive leadership team.”

The new appointments are subject to approval by the Australian Prudential Regulation Authority.