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.
Macquarie chairman Glenn Stevens and chief executive Shemara Wikramanayake will front investors at the group’s AGM on Thursday.Credit: AFR
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.
