Read the fine print on banks’ ATM fees cut
On face value, CBA boss Ian Narev and NAB chief Andrew Thorburn’s axing of ATM fees for customers of other banks seems so beneficent.
But as is often the case with our four pillars, read the fine print and things aren’t quite as generous as the headline.
Thousands of machines in the CBA and NAB ATM networks have been carved out from the $2 fee cut, so that Australian banking customers are still some way from achieving ATM nirvana.
Narev’s CBA got the jump on its peers on Sunday with the announcement that it was scrapping the fee, but there was a major caveat — it doesn’t include the network at CBA-owned Bankwest.
Bankwest’s 830 ATMs make up about one fifth of CBA’s network. Most of them, about 650, are on the east coast under a deal with billionaire Russ Withers’network of 7-Eleven stores.
Margin Call also understands those cash machines are some of the most profitable in the CBA empire.
CBA says the contracts between it and the Withers empire are now “under review”, although no one at Slurpee HQ, aka 7-Eleven head office, seemed to be aware of any impending changes.
Bankwest has been a major lender to 7-Eleven franchisees, extending them credit even when all other banks ran away due to the network’s wages scandal, so hopefully a peaceful outcome can be negotiated.
Also exempt from the fee-free bonanza are CBA ATMs in Bali, so holiday-makers looking to a familiar brand for a rupiah refill will still get stung.
Customers should also beware of the wider network in Thorburn’s NAB empire.
While the NAB-owned machines (1500 odd) are free for all, the much bigger, largely NAB-stamped rediATM network has been exempted from the fee cut for non-customers.
The word out of NAB’s Docklands HQ is that the arrangement for those 3100 rediATM machines (which are owned and operated by Cuscal) is “still being worked through”.
But there’s no equivocation over at Shayne Elliott’s ANZ or Brian Hartzer’s Westpac or Hartzer’s subsidiaries St George Bank, Bank SA and Bank of Melbourne.
And critics say the big four are all the same.
Hungry hippos
Which bank’s ATMs ate hundreds of cards from one of its big four rivals over the weekend?
CBA’s, of course.
And what was the reason?
Margin Call understands the chomping of about 200 cards resulted from a glitch related to CBA’s — perhaps a bit hasty — decision to scrap the $2 charge from its ATM network for non-customers.
It’s been that sort of year for Australia’s biggest bank.
Puzzle time
What is Fairfax boss Greg Hywood up to?
His $1.85 billion Domain spin-off is taking centre stage, but behind the scenes the media man appears to have other weighty matters on his mind.
The fine print to the Fairfax notice of annual meeting, released on Friday afternoon alongside the group’s 215-page Domain scheme documentation, reveals that a big chunk of Hywood’s long-term incentive payment for the current financial year is tied to a top-secret “strategic measure”, which shareholders will be asked to approve on November 2. How intriguing.
The “strategic measure” is so commercially sensitive that Fairfax won’t tell shareholders what it is, even though they will be asked to vote on it, which could be worth up to almost $700,000, or about four midnight blue Maserati Ghiblis, to the publishing boss this year.
“Due to the commercial sensitivity of the strategic measure, it will not be disclosed to the market at the current time, but will be disclosed after the test period has finished,” the notice says, cryptically.
Hywood’s long-term incentive pay could total $2.24 million in the year to June 30. Just under a third, 30 per cent of that, is tied to the mystery measure.
A Fairfax spokesman declined to comment on what Hywood might be up to.
Here’s hoping it isn’t another large-scale cost-cutting initiative at the group on the other side of the Domain spin-off.
Less distressing would be a tuning out of Macquarie Media as co-owners John Singleton and Mark Carnegie have already expressed interest in buying out its investment partner.
We’ll see.
Cat gets the cream
Fairfax chairman Nick Falloon’s epic scheme book reveals Domain boss and soon-to-be also board member Antony “The Cat” Catalano’s pay arrangements for the first time.
The Cat will be paid $1.2m in base pay to run his own listed empire under an open-ended employment contract that has a six-month termination clause, as well as a 12-month non-compete clause.
The Cat, who already has his own jet, super yacht and boutique luxury resort in Byron Bay, will also be entitled to a short-term cash bonus of almost $1m, plus a long-term incentive payment that could be worth as much as $5.04m.
All up, that means potentially $7.24m to the father of eight.
The long-term incentive would be issued to The Cat via free options worth 33 per cent of the value of Domain shares over the first month of trading, so from day one he would be 67 per cent in the money.
The options would vest over the next four years based on established performance criteria that relates mainly to the performance of Domain shares. But even if the hurdles are not met, the Domain board can elect to still issue the stock to the CEO.
Catalano, 50, who is already a top 20 Fairfax investor, will also be entitled to buy more Domain shares via an interest-free loan.
Happy days.
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