Latest news with #ASIC
News.com.au
13 hours ago
- Business
- News.com.au
Macquarie Group CFO exits amid investor backlash over executives' eye-watering pay
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.
Sydney Morning Herald
16 hours ago
- Business
- Sydney Morning Herald
Macquarie CEO pay riles investors as long-standing finance chief exits
Macquarie Group chairman Glenn Stevens has conceded that some of the bank's shareholders are not satisfied with the board's decisions on executive pay, amid debate over how the Sydney-based investment giant has responded to alleged compliance failings. In a quarterly update published on Thursday, ahead of its annual meeting, Stevens and Macquarie chief executive Shemara Wikramanayake also announced that company chief financial officer Alex Harvey was stepping down after a 28-year career at Macquarie. The company also said that its profits were down in its first quarter. But investors have been more interested in Macquarie's executive pay and its record on compliance, which has been in the spotlight after the Australian Securities and Investments Commission (ASIC) launched legal action against the bank in May, alleging 'repeated and systemic' misleading conduct over a failure to report short sales. Macquarie shares slumped 4.4 per cent in early trade. It was the watchdog's fourth regulatory action against Macquarie in just over a year. Earlier, in May, ASIC also slapped additional licence conditions on Macquarie Bank, citing several compliance failures relating to futures dealing and over-the-counter derivatives. Stevens said on Thursday that the ASIC matter on short-selling was before the courts so he was limited in what he could say, but that any remuneration effects from the case would be reflected in the coming financial year. He also vowed to take on the concerns of shareholders, while conceding that a 'significant minority' felt the board should have done more on executive pay. 'I also acknowledge 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,' Stevens said. 'The board hears your message and will reflect carefully on addressing those concerns.' Macquarie's remuneration report, published earlier this year, said it had taken into account 'risk and regulatory matters', particularly ASIC's licence conditions, and this had been reflected in the profit share awarded to Wikramanayake and the chief of Macquarie Bank Limited, Stuart Green.
The Age
16 hours ago
- Business
- The Age
Macquarie CEO pay riles investors as long-standing finance chief exits
Macquarie Group chairman Glenn Stevens has conceded that some of the bank's shareholders are not satisfied with the board's decisions on executive pay, amid debate over how the Sydney-based investment giant has responded to alleged compliance failings. In a quarterly update published on Thursday, ahead of its annual meeting, Stevens and Macquarie chief executive Shemara Wikramanayake also announced that company chief financial officer Alex Harvey was stepping down after a 28-year career at Macquarie. The company also said that its profits were down in its first quarter. But investors have been more interested in Macquarie's executive pay and its record on compliance, which has been in the spotlight after the Australian Securities and Investments Commission (ASIC) launched legal action against the bank in May, alleging 'repeated and systemic' misleading conduct over a failure to report short sales. Macquarie shares slumped 4.4 per cent in early trade. It was the watchdog's fourth regulatory action against Macquarie in just over a year. Earlier, in May, ASIC also slapped additional licence conditions on Macquarie Bank, citing several compliance failures relating to futures dealing and over-the-counter derivatives. Stevens said on Thursday that the ASIC matter on short-selling was before the courts so he was limited in what he could say, but that any remuneration effects from the case would be reflected in the coming financial year. He also vowed to take on the concerns of shareholders, while conceding that a 'significant minority' felt the board should have done more on executive pay. 'I also acknowledge 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,' Stevens said. 'The board hears your message and will reflect carefully on addressing those concerns.' Macquarie's remuneration report, published earlier this year, said it had taken into account 'risk and regulatory matters', particularly ASIC's licence conditions, and this had been reflected in the profit share awarded to Wikramanayake and the chief of Macquarie Bank Limited, Stuart Green.
Yahoo
18 hours ago
- Business
- Yahoo
Macquarie's quarterly profit falls, CFO Harvey decides to step down
(Reuters) -Australia's top investment bank, Macquarie Group, reported a decline in first-quarter net profit on Thursday and announced that Chief Financial Officer Alex Harvey will step down at the end of 2025. Harvey will retire mid-2026 after completing an extended handover to his successor, Frank Kwok, who has been with Macquarie for 28 years and currently serves as deputy CFO, the company said. The leadership changes come as Australia's corporate regulator (ASIC) has sued Macquarie, alleging it misreported up to A$1.5 billion worth of short sales over a 15-year period, misleading the market and violating transparency rules put in place following the global financial crisis. Macquarie indicated it may adjust executive bonuses following the ASIC lawsuit, stating, "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." "As CFO for the last eight years, Alex has delivered a significant transformation in Macquarie's financial management and stakeholder engagement activities, playing a key role in driving the global growth of the Group," Macquarie said. The bank's first-quarter net profit declined due to lower contributions from its Asset Management arm and Commodities and Global Markets unit. Macquarie Asset Management experienced a softer quarter compared to last year, with net profit contribution down primarily due to timing of investment-related income from asset realisations. Meanwhile, Commodities and Global Markets unit's net profit contribution fell due to reduced contribution from Commodities, which recorded lower net interest and trading income in North American Gas and Power. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
ABC News
a day ago
- Business
- ABC News
Can customers trust how banks are using AI?
ING's Australia's chief executive Melanie Evans responds to ASIC's warning that the banks can't afford to get the implementation of artificial intelligence wrong.
