Mike Baird of NAB closer to strutting stuff on main stage

“Magic” Mike Baird (as he is known internally) is firmly positioned to be the next NAB boss.

NAB’s Mike Baird. Illustration: Sturt Krygsman

“Magic” Mike Baird (as he is known internally) is firmly positioned to be the next NAB boss after being moved to run its retail operations and given the job of attempting to repair its reputation.

The former NSW premier has been chief customer officer of corporate and institutional banking since April last year, but has moved to the new role as the bank seeks to “earn the trust of our customers”.

The concept of a former politician restoring trust is admittedly a long bow, but there is no doubting his sales ability and political insights.

The series of changes announced yesterday represent CEO Andrew “Battery Man” Thorburn’s third management revamp in his four years as leader, and in part follows damage suffered in the Hayne bank inquiry.

He has probably a couple more years in the chair and is certainly not leaving anything to chance, even as threats of criminal charges are hurled from the royal commission.

Don’t miss The Deal in Friday’s The Australian for an exclusive interview with Mike Baird, in which he details his transition from NSW Premier to NAB executive.

Yesterday’s moves were forced on Mr Thorburn as No 2 Antony Cahill has accepted a job running Visa’s European operations and former wealth boss Andrew Hagger said in July that he wanted out.

Hagger last month was under fire from the royal commission over his dealings with ASIC and, as his wealth division is being sold from under him, his departure from NAB’s senior ranks is not unhelpful.

For the record, the man himself is not expecting to be hit with any formal legal actions as a result of his evidence.

But when everyone else in the industry is ducking for cover in the hope of not losing their heads, Thorburn is batting on like there is no tomorrow and some business is still to be won.

The other banks are also keeping their heads down, working on the theory that nothing they say or do will be taken seriously right now, so better not to do anything.

“Battery Man” Thorburn is taking a different approach and this management change comes after his recent high-profile stand against the interest rate hikes imposed by the other big banks. While other banks are lifting variable rates, NAB is holding, for now.

The typical bank run rate says it’s better to lift rates to protect profits, then discount to get new business in the door.

Thorburn is different in actually looking after existing customers rather than adopting usual practice then hitting them in the head, as his rivals did in the name of better profits.

The NAB move has, not ­surprisingly, gone down well ­internally, but whether external customers are taking any notice remains to be seen.

Taken at face value, and ­putting cynicism to one side, Thorburn’s courage is to be commended, but for it to work it will require customers to come to the party and actually support the bank.

Hagger plans to join David Batstone’s Not for Sale, the anti-human trafficking organisation, when he leaves the bank. The jazz-playing executive met Batstone through World Vision Australia boss Tim Costello.

His departure, of course, comes in the wake of some torrid sessions before the royal commission, centring on his dealings with ASIC.

Hagger joined the bank a decade ago after 21 years at PwC on the urgings and 55 phone calls from then Australian boss Ahmed Fahour.

Highly regarded former Westpac banker Rachel Slade continues her climb up the ranks, taking part of Cahill’s old brief in charge of NAB products, or “experiences”, as the bank puts it.

Slade becomes the fourth female in Thorburn’s leadership team and is highly regarded as a collegiate executive.

David Gall moves from risk to Baird’s old job in institutional banking, while Shaun Dooley shifts from treasury to the key risk portfolio.

Baird, in his retail banking role, will lead a business including more than 700 branches, 7000 bankers, broker partnerships, ­direct banking and digital bank UBank.

Boral’s Kane man

In her annual report note, Boral chair Kathryn Fagg took the unusual step of affirming 76-year-old Mike Kane in the chief executive role for another “two to four years” on top of the six years he has already served.

She also noted former AMP chair Catherine Brenner would step down after eight years on the board, leaving Brenner’s only non-executive role at Coca-Cola Amatil. That role will also end next year.

This leaves three women on the seven-strong board, which is well above the national average.

Pay rises for fiasco

Wesfarmers chair Michael Chaney and his board were directly responsible for the $2 billion Bunnings UK fiasco, yet he was awarded a pay rise last year, earning $780,206.

Every Wesfarmers director earned more last year than they did the previous year, yet directors are supposed to be held accountable for the decisions affecting shareholders. When unveiling the 2016 UK expansion, Chaney declared it was the best bit of due diligence he had seen in his time at the company.

Arguably, the due diligence was great but the execution wasn’t, and when present boss Rob Scott pulled the pin earlier this year he crystallised the losses, drawing a line in the sand.

Some argue the company could have battled through to show the deal was working.

Once again, this was a board decision yet every person on the Wesfarmers board paid themselves more in 2018 than they did in 2017. Something is just simply wrong in this equation.

When questioned at the time of the exit about board responsibility by BAML’s David Errington, Scott said there would be full accountability. If so, we are yet to see it on the pay scorecard.

Scott’s own bonus was paid out at 84.4 per cent, meaning he forfeited just 15.6 per cent and pocketed $500,000 in cash with $5.8 million worth of shares coming his way if shareholders approve it at the annual meeting.

Bunnings boss Mike Schneider was paid 74.5 per cent of his allotted bonus, which equated to $675,000 in cash and 2.7 million shares.

Much is made of the fact former Wesfarmers boss Richard Goyder missed his potential $1.6m bonus in the wake of the Bunnings UK debacle, yet those who participated in the decision enjoyed a pay rise. Goyder, it should be noted, worked only until November last year, so was never going to go close to the $4.1m earned the previous year.

He also owns 727,364 shares worth $36.4m paying $1.4m a year in dividends, so the rent is safe.

Coles chair James Graham offloaded $316,400 worth of stock, leaving him with 790,188 Wesfarmers shares paying $1.6m a year in dividends.

Former CFO Terry Bowen offloaded 70 per cent of his holding in the company when he left last ­November, selling 127,351 shares for about $6.3m.

Missing from the annual report yesterday is any obvious mention of the pay earned by retail adviser Archie Norman. He is a consultant so avoids mention and has famously made known in the UK that he told Wesfarmers not to buy Homebase.

Former Bunnings boss John Gillam was a consultant to the company from December 2016, so his pay levels were also not included in the annual report.

The annual meeting notice confirmed Paul Bassat was stepping down from the board, for time commitment reasons, after just six years in the job.

This is a big blow to Rob Scott given Bassat is technology-savvy as a co-founder of Seek and venture capital fund Square Peg.

Scott has talked up his desire to get Wesfarmers firmly involved in better use of data and technology. But now, with the exception of ­Vanessa Wallace, he is short of ­apparent skills in these fields.