Small pay rise for ANZ chief executive Shayne Elliott

ANZ CEO Shayne Elliott pocketed a small pay increase last year after the board bumped up his fixed remuneration before the onset of COVID-19.

ANZ chief executive Shayne Elliott had not received a fixed remuneration increase since he became CEO in January 2016. Picture: Adam Yip

ANZ chief executive Shayne Elliott pocketed a small pay increase last year after the board bumped up his fixed remuneration before the onset of COVID-19.

Mr Elliott’s statutory remuneration rose from $5.18m to $5.22m, including a $400,000 boost to his cash salary in October 2019 when an external review found his package was not competitive with major-bank counterparts.

The actual pay received by the ANZ chief was $3.72m. In the same year, though, he forfeited $3.8m in lapsed deferred pay.

The chair of ANZ’s remuneration committee, Alana Atlas, said the board had engaged PricewaterhouseCoopers in September 2019 to conduct a pay review for the senior executive team.

As a result of the review, the fixed component of Mr Elliott’s remuneration was hiked to $2.5m and his long-term variable pay was reduced by $700,000, with the target decreasing from 200 per cent to 140 per cent of fixed pay.

Mr Elliott had not received a fixed remuneration increase since he became CEO in January 2016.

Ms Atlas said five disclosed executives also got pay rises in the review, including deputy chief executive Alexis ­George, chief financial officer Michelle Jablko, chief risk officer Kevin Corbally, retail and commercial boss Mark Hand and digital and Australia chief Maile Carnegie.

A further increase was granted when the acting head of the New Zealand business, Antonia Watson, got the role permanently. In the current financial year, no senior executive will get a fixed-pay increase.

Late last month, ANZ reported a 42 per cent slump in cash profit to $3.8bn, mostly driven by full-year credit impairment charges of $2.7bn, up from $795m.

There was also $815m of impairments to Asian associates in the first half.

The bank ended the period with a common equity tier one capital ratio of 11.3 per cent, down from 11.4 per cent, and the return on equity tumbled to 6.2 per cent from 10.9 per cent.

Despite this, Ms Atlas said Mr Elliott had had a successful year, and the bank was well-positioned to assist its customers and the community in the most challenging environment in decades.

The board, however, had decided to take into account the significant impact of COVID-19 on returns and the profitability of the business, exercising its discretion to halve Mr Elliott’s average variable remuneration to $1.25m.

Long-term variable pay will be slashed from $4.2m to $3.5m.

“This reinforces (Mr Elliott’s) focus on achieving longer-term strategic objectives and creating long-term value for all stakeholders,” Ms Atlas said. “This allocation, of course, remains subject to shareholder approval at the 2020 annual meeting and performance hurdles being met.”

The CEO’s total awarded remuneration in 2020, including long-term incentives which may or may not vest, will be $7.25m, down from $7.8m.

The board halved the variable remuneration outcomes for senior executives, resulting in an average outcome of 36 per cent of the maximum opportunity.

Performance rights granted in late 2016 to the CEO and senior executive team did not meet their hurdles when tested in November 2019 and therefore lapsed.

As flagged, ANZ also moved to a new approach to pay last year, with variable remuneration now based on the group’s performance rather than the individual for about 80 per cent of staff.