For his sins and his own underperformance last time around, PwC Australia’s imported chief, Kevin Burrowes, gets another crack before the Senate’s inquiry into the integrity of consulting firms on Friday.
Back in October, despite the opportunity for all the preparation the disgraced firm’s money could buy, Burrowes put in a performance before the committee, chaired by Richard Colbeck but dominated by the ALP’s Deb O’Neill and the Greens’ Barbara Pocock, that was widely panned as undercooked and underwhelming.
The inquiry follows revelations that the firm’s former tax partner, Peter Collins, shared confidential information with other staff and partners at the firm regarding multinational tax measures it was helping Treasury to develop in 2015.
There’s no love lost between Burrowes and the committee. After his last appearance, Burrowes called Colbeck and sent off legal letters over further questioning the PwC chief had received after his appearance.
So don’t expect a red-carpet welcome in Canberra this time around for Burrowes, who is also now facing the prospect of a class action from former partners at the firm aggrieved over the loss of their retirement entitlements in the wake of the tax scandal, as well as seeking to conduct an internal integrity inquiry into former PwC chief executive Luke Sayers.
And that’s all just this week in a corporate disaster that has been unfolding both under the radar for several years and then out in the public domain for the past 12 months.
Singing back-up once again for Burrowes at the interrogation desk will be the firm’s chief risk and ethics executive, Jan McCahey, who you’d have to say is the yang to Burrowes’ yin and seems to know all the right things to say and when to say them.
Still, the accounting types – all of PwC’s big firm peers will be on deck before the committee on Friday too – have all been wildly prepping for the anticipated grilling.
Fresh in executives’ minds is the experience of Deloitte boss Adam Powick, who in July last year at a public hearing was asked right off the bat by O’Neill whether he was “really worth seven times the salary of the Australian prime minister”.
Powick fumbled about searching for a response before O’Neill asked the question again, to which he replied a mere “no”.
In the universe of accountants, folks like things to be all buttoned down and predictable, so that the unpredictability of the likes of O’Neill and Pocock must be terrifying to the execs who have to appear.
Maybe the best preparation is to prepare to handle the unexpected.
Big payday coming for outgoing NAB boss
Running NAB post-Kenneth Hayne’s royal commission has eaten more than fours years out of Ross McEwan’s life, but the New Zealand-born financial services executive can expect a long tail of financial rewards that could top $19m to flow into his early retirement, courtesy of the Aussie bank.
McEwan, 66, will exit NAB on July 1, with NAB’s business banking boss Andrew Irvine to take over the top office from April 2.
McEwan will have at least 590,000 rights to buy NAB shares accumulated by the time he leaves in July. There will be even more rights probably awarded for the nine months of the current financial year he will see out before leaving.
Some of the rights McEwan has will vest steadily over a four-year period from when they were issued while he was CEO and do not have any performance threshold attached. Other rights he has been steadily awarded are subject to performance measures and vest only after four years have passed if thresholds are met.
Based on the pre-opening NAB share price of $32.20 on Wednesday, and if all performance hurdles are cleared, shares to McEwan from the rights would be worth $18.9m.
Of course, this could be less if hurdles are not met and not as many shares vest, and/or if NAB shares go backwards. But it could also be more if hurdles are met and the NAB share price increases over the period of the next four years.
But, all going well, the rights could potentially be a retirement game changer for the exiting chief. Under McEwan’s initial contract, he was required to give 26 weeks notice of his exit, and hinted in Wednesday’s media call that NAB chair Phil Chronican got the news from him not far from Christmas. The chairman had a successor right under his nose.
McEwan is also subject to a six-month period of restraint, so that his exit package will also include half of his $2.5m annual base pay.
On top of all that, the annual report shows McEwan already owns just under 68,000 shares outright that are worth $2.2m. More rights have likely vested too since the annual report was published.
Taking a little gloss off is an outstanding $1m loan McEwan has from the bank. That probably relates to the mortgage he took out from the bank in early 2020 to assist with the $3.8m purchase of a home in Toorak.
McEwan said on Wednesday that he planned to remain in Melbourne but also spend more time in his native New Zealand.
There will be few industry watchers, however, who will lament McEwan’s potential payday.
“Ross potentially had the strongest support out of any bank CEOs from the investor base,” Citi research, which has a sell recommendation on NAB shares, reflected in a note to clients sent on Wednesday.
“Since Phil Chronican and then Ross McEwan steadied the ship post the royal commission, NAB investors have enjoyed a run of generally strong execution, transparency and simplification.
“Going forward, Mr Irvine comes into the top role with the bar set very high.”
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