NAB’s new chief Ross McEwan earns $2.4m after Covid pay cut

New National Australia Bank chief executive Ross McEwan pocketed $2.42m in remuneration for part of 2020.

NAB chief executive officer Ross McEwan.

New National Australia Bank chief executive Ross McEwan pocketed $2.42m in remuneration for part of 2020, after taking a 20 per cent cut in his fixed pay in the September half-year due to the global pandemic.

NAB’s annual report, released on Wednesday, also showed that former chief executive Andrew Thorburn lost $7m in share and rights entitlements in 2019.

Mr Thorburn left NAB in February last year after he was targeted — along with then-chairman Ken Henry — in financial services royal commissioner Ken Hayne’s final report.

Mr McEwan, who became NAB CEO in December last year, volunteered a $250,000, COVID-related cut to his cash salary, which came in at $1.87m. As previously flagged, the CEO and other group executives did not receive any short-term bonuses, with Mr McEwan, as a recent recruit, failing to qualify for any long-term variable reward.

While his statutory remuneration was $2.42m, the NAB chief’s realised pay for the period was $1.84m.

At NAB’s full-year result unveiled last week, Mr McEwan said shareholders were hurting and the bank’s senior executives needed to “share that pain”.

Remuneration committee chairman Anne Loveridge said in the annual report, released on Wednesday, that the CEO had refreshed NAB’s long-term strategy and implemented a new operating model.

“We have renewed the executive leadership team through the appointment of four new group executives and a change in position for one other,” Ms Loveridge said.

She also flagged a “modest” range of changes to the remuneration framework in 2021.

Among other things, the bank would ensure its performance measures aligned with the refreshed strategy, simplify the calculation of the annual variable reward, and improve governance through a clearer application of accountability and remuneration consequences.

Mr McEwan’s recruitment as CEO triggered the departure of some internal leadership aspirants, including the head of the consumer bank, Mike Baird, and business banking boss Anthony Healy.

Mr Baird left with a total package of $1.93m, including $1.11m in “other” remuneration, while Mr Healy’s departure package came to $2.22m, of which $1.17m was other remuneration.

Both former executives received termination payments equal to 26 weeks of their base salaries, in line with their employment contracts.

The remuneration report said 1988 employees were identified as not having met risk expectations and accountabilities in 2020, up from 1706 the year before.

Also in 2020, there were 1105 breaches of the bank’s code of conduct that resulted in formal consequences, compared with 1278 in 2019.

The consequences included 225 staff leaving NAB and 880 employees receiving coaching or other remedial measures, including the loss of their variable ­rewards.