Macquarie Group pay surge as Millionaires’ Factory lives up to its nickname

Macquarie Group’s record profit delivers pay of over $20m each to two key executives, and its CEO doesn’t even earn the most.

Macquarie CEO Shemara Wikramanayake - not Macquarie’s highest-paid banker.

Macquarie Group’s record profit has seen the “Millionaires’ Factory” deliver bumper awarded pay of more than $20m each to two key executives, including boss Shemara Wikramanayake.

But for the year ended March 31, Ms Wikramanayake was not the highest paid banker at Macquarie, as head of commodities and global markets Nick O’Kane took the mantle.

The annual report came as Macquarie reported a record $3.02bn full-year profit, buoyed by a surging income in the commodities and markets unit.

Macquarie was dubbed the Millionaires’ Factory prior to the global financial crisis as its bankers benefited from big pay packets as the group worked on large mergers and acquisitions and expanded across the globe.

Ms Wikramanayake’s awarded pay was $20.7m for 2021, up from $18.1m last year when COVID-19 saw Macquarie pull back from paying the cash component of short-term bonuses. For 2021’s pay about $15.9m reflected retained profit share.

Awarded pay reflects what was allocated to the Macquarie executive in salary, bonus and shares for the 2021 year.

Mr O’Kane’s awarded pay swelled to $26.3m for 2021, from $19.5m in the prior year. It reflected $816,732 annual fixed salary, available profit share of $10.2m and retained profit share of $15.3m.

He joined Macquarie in 1995 and took the reins as head of the commodities and global markets division two years ago.

His big pay day comes as the division was the biggest contributor to Macquarie’s record profit as high levels of volatility and an extreme US weather bolstered activity.

The next highest paid executive on 2021 awarded pay was outgoing head of Macquarie’s asset management arm Martin Stanley who raked in $19.6m for 2021, versus $18.9m the prior year. Ben Way - a 15-year Macquarie stalwart - has taken over from Mr Stanley as head of that unit.

The Australian Prudential Regulation Authority had urged banks in light of the COVID-19 crisis to last year consider deferring dividend decisions and “appropriately limit executive cash bonuses”, during the challenging environment. Macquarie responded by ceasing the cash part of short-term bonuses for the 2020 year and holding the amounts in shares, but that was unwound for 2021.

In the statutory pay stakes, Ms Wikramanayake’s 2021 pay was almost $16m up from $14.9m a year earlier. The 2021 amount included an annual salary of $820,244, a short-term bonus of $4.8m and share awards of $9.5m.

The statutory pay tables - which are required by regulators - include the amortisation or scaled payment of Macquarie’s share awards that are paid to executives. Retained profit share arrangements are paid on a rolling basis over seven years.

Mr O’Kane’s pay in the statutory report printed at $24.8m, ballooning from $13.9m in 2020.

Macquarie has faced scathing criticism for its lucrative pay packets over the past 15 years, but the firm has argued the structure is highly linked to performance. The annual report noted that fixed pay for key executives in 2021 reflected about 10 per cent of total awarded remuneration, with the balance “at risk”.

Former CEO Nicholas Moore’s pay peaked at $32.9m in 2007 ahead of the global financial crisis. But in 2009, during the fallout and seizure of funding markets, he was paid just $290,756.

Mr Moore departed Macquarie with a $27.9 million bumper pay day, and remains a top 20 Macquarie shareholder.

Macquarie’s ASX statements on Friday noted long-term chairman Peter Warne intended to stand for re-election for an additional year, at the request of the board. It cited oversight of board renewal and lingering global uncertainty relating to the pandemic for Mr Warne’s extension.