QBE CEO John Neal takes $550,000 pay cut over ‘personal decisions’

John Neal’s $3m salary is cut following revelations he’d developed a relationship with an assistant to the board.

QBE chief executive John Neal (Renee Nowytarger/The Australian)

The chief executive of QBE John Neal has had his salary cut by $550,000 in the past financial year due to “personal decisions by the CEO that have been inconsistent with the board’s expectations,” according to QBE’s annual report released this morning.

Mr Neal, who has been CEO for almost five years, was set to receive a short-term bonus of $2.76 million for the 2016 financial year.

However, the group’s just released annual report shows that the bonus was cut by 20 per cent to $2.21m due to Mr Neal’s “personal decisions”.

“I was not timely in disclosing to the board a personal relationship, they took that decision for that reason,” Mr Neal told a media conference today following the release of the insurance group’s annual results.

“This is a deeply private matter ... it’s a material amount for me, I’ve understood it, I’ve accepted it, but it was not my decision.”

The board’s penalty followed what it saw as a breach of QBE’s executive code of conduct, which says executives must disclose in a timely manner personal relationships that have the potential for conflict of interest.

After the bonus cut, in the year Mr Neal was paid a total of $3 million.

The Australian recently revealed that Mr Neal had developed a relationship with the assistant to the board of QBE.

Mr Neal said there had been a full independent review of expenses within the office of the CEO and that no inappropriate conduct had been uncovered.

He said he had not been asked to resign over the breach.

“The issue was simply ... my disclosure of a personal relationship, the code of conduct requires that that’s disclosed immediately to the board, which I did not do, and it’s for that reason that the decision was taken to cut a percentage of my STI (short term incentive),” Mr Neal said.

“The group CEO has had a commendable year and delivered a strong full year result for QBE. His performance is well regarded by the board. However, both parties agree some recent personal decisions by the CEO have been inconsistent with the board’s expectations.

It was recently revealed that Tim Worner, the chief executive of billionaire Kerry Stokes’ Seven West Media had $100,000 stripped from his bonus after it was revealed internally that he had conducted an affair with group personal assistant Amber Harrison.

The bonus cut for Mr Neal comes as he seeks to finalise the exit of his group chief operating officer Colin Fagen from the group earlier this month.

As also revealed by The Australian, Mr Fagen has engaged workplace law firm Harmers to work on his behalf towards amid discussions over his shock exit.

Mr Fagen was also involved in a long-term workplace relationship, but which has recently ended.

Mr Neal would not comment further on Mr Fagen’s spectacular exit from the group in early February, but maintained that his departure and the matter of Mr Neal’s workplace affair were unrelated.