Macquarie to cut cash bonuses of top executives
SYDNEY, March 31 |
SYDNEY, March 31 (Reuters) - Australian investment bank Macquarie Group (MQG.AX), once dubbed the "millionaires factory", plans to cut the cash bonuses of over 300 top executives as the group heads towards its first drop in annual profit in 17 years.
Faced with rising bad debts, tight credit markets, and under pressure from a government calling for curbs on excessive pay packages for bank executives, Macquarie said on Tuesday it would reduce cash payouts from its profit-sharing scheme.
The cash component of Chief Executive Nicholas Moore's profit share would be cut to 45 percent from 70 percent, while members of the bank's executive committee would see their cash component lowered to 50 percent from 60 percent.
For other executive directors the ratio would be cut to 50 percent from 80 percent.
In return, the bank plans to increase the proportion of the bonus to be re-invested in shares.
"While the proposed changes reflect recent remuneration trends, they remain consistent with Macquarie's long-standing approach where staff profit share is linked to profitability," Macquarie said in a statement.
Australian Prime Minister Kevin Rudd has said regulators would work on rules to link bank capital requirements to executive pay packets, and hoped the new measures could be in place internationally by the end of the year.
Last year, former chief Allan Moss departed with an A$80 million ($54.3 million) retirement deal, made up of a bonus payment, shares and a payout salary. His replacement, Nicholas Moore, started on base pay of A$27 million a year.
The proposal is subject to approval by shareholders at Macquarie's annual general meeting in July. The changes would apply to remuneration from the year ended March 31, 2009 and would have no impact on the bank's 2009 full year result. ($1=1.473 Australian Dollar) (Reporting by Mette Fraende; Editing by James Thornhill)
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