Macquarie Group CFO exits amid investor backlash over executives' eye-watering pay

News.com.au

24-07-2025

Macquarie Group's long-serving chief financial officer will leave the company, as the investment bank faces a shareholder backlash for not cutting executives' eye-watering pay packets despite a series of compliance blunders.
Alex Harvey will depart from the bank after 28 years in December, the company announced in its first-quarter update ahead of its annual general meeting in Sydney on Thursday.
His departure comes as the bank faces the prospect of its first-ever strike — when 25 per cent or more of shareholders vote against a company's remuneration report — after two influential proxy advisory firms raised concerns Macquarie had not done enough to dock executive pay following actions by financial regulators.
In May, the Australian Securities and Investments Commission (ASIC) filed proceedings against Macquarie Group in the NSW Supreme Court alleging it engaged in misleading conduct by misreporting millions of short sales to the market operator for over 14 years between 2009 and 2024.
It marked the fourth ASIC action against Macquarie Group entities since last year.
ASIC had already imposed strict conditions on Macquarie's financial services license earlier this year in response to compliance failures in its derivatives trading arm.
Proxy firms CGI Glass Lewis and Ownership Lewis, which advise institutional investors on how they vote, both criticised Macquarie for failing to adequately slash executive pay, according to their recommendations circulated ahead of Thursday's AGM and seen by The Australian Financial Review.
Macquarie Group chief executive Shemara Wikramanayake, Australia's highest-paid CEO, was awarded $24.03 million in the year ended March 31, down from $25.3 million a year earlier.
Ownership Matters said measures to reduce how much profit flowed to Ms Wikramanayake and Macquarie Bank boss Stuart Green did not 'appear sufficient' given the long list of regulatory issues, while Glass Lewis said there had been an 'inadequate response and transparency on regulatory and risk-related matters', according to the report.
'The CEO's FY25 profit share of $22.5 million was circa 5 per cent lower than in FY24 despite a 5 per cent increase in profit, indicating her profit share was reduced by up to $2.5 million; only one other disclosed executive appears to have experienced a decline in profit share in FY25 relative to FY24 as a response to the compliance issues highlighted by ASIC,' Ownership Matters' report said, per The AFR.
A number of major international investors had already indicated they would vote against the remuneration report, including Californian pension funds CalPERS and CalSTRS as well as state investment vehicle SBA Florida.
Today Macquarie Group Ltd shares have dropped by 4.63 per cent at the time of writing.
In his speech to investors, Macquarie Chairman Glenn Stevens defended the bank's 'risk culture'.
'Risk culture is central, and a great deal of work has been done over the past several years to respond to changes in our business operations and the expectations of regulators and the communities in which we operate,' he said.
'Where shortcomings are identified, the Board holds staff accountable, seeks to incentivise future improvement and reflects on what the issue might tell us about the organisation's culture.'
Mr Stevens insisted 'there were remuneration impacts for several executive committee members and others, and these impacts also incorporated incentives for all senior executives to resolve the issues'.
'The company is also directing significant resources into a range of remediation activities, as well as continuing to invest in programs to further reinforce our frameworks, systems and controls.'
Mr Stevens added 'so far as remuneration impacts are concerned, this will be an FY26 matter, about which the board will come to a view over the period ahead'.
But he acknowledged that 'while Macquarie's remuneration system is strongly supported by shareholders, a number of shareholders have the view that the Board has not adequately reflected risk shortcomings in our FY25 decisions'.
'The Board hears your message and will reflect carefully on addressing those concerns,' he said.
A number of large investors have also pushed resolutions for Thursday's AGM that would force Macquarie to beef up disclosures related to its exposure to fossil fuel companies and projects.
Mr Stevens urged shareholders to vote against the proposed resolutions.
He said Macquarie had been 'consistent in our response to climate change' and 'accept the best available science'.
'We think the transition to decarbonised energy must be managed and orderly,' he said.
'Simply shutting down oil and gas is not viable. We recognise the reality that, even as net zero objectives are pursued, the world will need carbon-based energy for quite some time. 'These principles will guide activity as Macquarie's climate strategy and disclosures continue to evolve to meet the needs of clients and investors, and the requirements of governments and regulators across markets, including efforts towards more consistent disclosure.'
His comments came as Macquarie reported a fall in net profit contribution in the three months to June 30 compared with the prior corresponding period.
The company said improved performance in its Banking and Financial Services (BFS) and Macquarie Capital (MacCap) divisions were more than offset by lower contributions from Macquarie Asset Management (MAM) and Commodities and Global Markets (CGM).
The group had a capital surplus of $7.6 billion as of June 30.
'Macquarie remains well-positioned to deliver superior performance in the medium term with established, diverse income streams,' the bank said in a statement.
'This is due to deep expertise across diverse sectors in major markets with structural growth tailwinds; patient adjacent growth across new products and new markets; ongoing investment in the operating platform; a strong and conservative balance sheet; and a proven risk management framework and culture.'
Announcing the departure of Mr Harvey, Macquarie noted he had played a 'key role in driving the global growth of the group'.
He will be succeeded by deputy CFO Frank Kwok.