Commonwealth Bank of Australia paid Chief Executive Officer Ian Narev’s A$7.8 million ($7.2 million) in its last business year, during which the lender reported record profit.
The country’s largest bank by market value reported in its annual report today that it had boosted Narev’s salary in the year ended June from A$5.7 million in the previous year, when he was CEO for seven months. He’s still the lowest paid among the heads of the nation’s four biggest banks.
Australian lenders are beating a slowdown in credit demand and posting record profits by cutting costs and jobs. CBA’s cash profit in the business year that just ended climbed 10 percent to a record A$7.82 billion as it boosted earnings from wealth management and bad-debt costs shrank in the second half of the year. The bank’s shares touched an all-time high on Aug. 14.
“There is only a limited amount of leadership talent available and you need to pay to attract that talent,” Peter Swan, a Sydney-based professor at the Australian School of Business, said by phone. “CBA shareholders are getting a bargain when compared to other banks’ performances and CEO pay.”
Narev was awarded A$2.5 million in fixed salary and pension and the rest in incentives and equity awards, according to the bank’s annual report.
His pay compares with A$10.1 million in the year to September 2012 for Australia & New Zealand Group Ltd. CEO Mike Smith, A$9.6 million for Westpac Banking Corp. CEO Gail Kelly and A$8.8 million for National Australia Bank Ltd. CEO Cameron Clyne, according to the lenders’ most recent annual reports.
CBA’s fiscal year ends in June, compared with September for its main competitors.