Commonwealth Bank of Australia (CBA) CEO Matt Comyn was the highest-paid among Australia's big four bank chiefs in fiscal 2023, earning about A$7.3 million, a 5.19% yearly increase.
Comyn's compensation included a A$2.5 million base salary, about A$2.6 million in long-term incentives, about A$1 million in stock awards, and about A$1.3 million in perks and other compensation, according to S&P Global Market Intelligence data.
The total compensation of Westpac Banking Corp. CEO Peter King increased the most year over year, rising 14.45% to about A$5.7 million from about A$5 million. While King's base salary rose to about A$2.4 million, the increase was primarily driven by A$2.1 million in stock awards, up from about A$1.5 million in 2022.
ANZ Group Holdings Ltd. CEO Shayne Elliott's total compensation increased 12.70% to about A$6.2 million from about A$5.5 million, with stock awards increasing to about A$2.5 million, from about A$2 million in the previous year, Market Intelligence data show.
The 2023 pay of National Australia Bank Ltd.'s former CEO, Ross McEwan, decreased 1.5% to about A$6.2 million, from about A$6.3 million in 2022, due to a revision in the bank's executive pay framework in September 2023, which reduced maximum remuneration for group executives by 11%, according to a company disclosure. Andrew Irvine succeeded McEwan as CEO on April 2.
Despite this decrease for the lender, the profits of the big four Australian banks surged in 2023 due to an increase on profit margins amid rapid interest rate hikes by the Australian central bank, said David Richardson, senior research fellow at The Australia Institute. The central bank has raised its policy rate to 4.35% from 0.1% since May 2022.
"Over the last year or so the big banks have increased their profit by passing on interest rates set by the Reserve Bank [of Australia]," Richardson told Market Intelligence in an email. "That increased profits and may have been behind increases in CEO pay, especially the big increases in CEO pay for ANZ and Westpac."
"Most of the incentive schemes seem to pay CEOs very well even if they do no more than match the index," Richardson said, noting that bank CEO earnings range from 59 to 75 times the average weekly earnings in Australia. "We think that is far too high."
During ANZ's May 7 fiscal-half results, Elliott warned of rising cost-of-living pressures impacting customers. But while bank CEOs have expressed caution about the high-rate environment and its impact on customers, the rising interest rates have led to increased profits for banks, potentially contributing to higher executive compensation.
