Macquarie’s $20m man Nicholas Moore turns royal commission grilling into finance master class

Macquarie boss Nicholas Moore’s turn in the Hayne hot seat quickly morphed into a tutorial on how to run a finance shop.

Macquarie Group's outgoing CEO Nicholas Moore arrives at the banking royal commission. Picture: AAP

Outgoing Macquarie boss Nicholas Moore need not have feared his appearance before the banking royal commission today as he gave a tutorial on how to run a financial services company rather than endure a grilling.

The key to Macquarie’s success centres on longevity which creates a partnership between staff and the firm.

Cross the line and you will be shown the door but do the right thing and you too have the chance to earn $19.7 million a year just like Nicholas did last year.

Moore confided the Macquarie pool was based on profit not bonuses on revenue as applies elsewhere.

Follow the banking royal commission live blog for updates

This means you got paid on outcomes not output and works better.

Asked by counsel Michael Hodges whether the pay was worked out on “intuitive synthesis”, commissioner Hayne had to interject to note the term was used to apply to criminal sentences.

Chuckles all around but basically Hodge’s term was right.

The interrogation started with an enforceable undertaking back in 2012 with no mention of the recent concerns raised about taxes in Germany.

Moore, with forensic detailed, explained the result of the 2012 snafu which was basically bringing the full force of the Macquarie risk management system over the broking unit.

This meant heads were chopped, internal audits were brought in for regular checks, central office risk controls were imposed and the third and most effective line of defence was staff accountability.

In stark contrast to the mainstream banks, Macquarie imposes strict accountability on staff.

If you don’t do your job well then there are consequences.

Macquarie isn’t the only house which retains executives for the long haul, with UBS another keeper.

It works because people trust the system so the variable pay formula works over time and everyone trusts they will be looked after.