Commonwealth Bank chief Ian Narev collected $12.3 million for the financial year, soaring from last year's $8 million pay day.
The CBA’s annual report revealed this inflated figure, which included bonuses from stocks resulting from the bank’s profitability and customer service success in previous years. During the 2016 financial year, the bank reported paying a total of $44.8 million to its executives – about half of that in cash.
Mr Narev’s pay day makes him the highest-paid big four banker in Australia this year, however, Macquarie Group chief executive Nicholas Moore raked in $16 million last year. Still, the CBA chief is ahead of rival bosses, such as ANZ chief executive Mike Smith, who was paid $7.6 million in his final full year. Westpac chief executive Brian Hartzer received $5.7 million (for a part-year in the position).
This news comes in the wake of a series of scandals at the CBA that have led to calls for a Royal Commission into the nation’s whole banking sector. Earlier in August, the CBA, along with most of the banking sector, was criticised for withholding the RBA’s 25-point cash rate reduction, while pushing through higher rates on new term deposits.
This sparked an outcry, with the Government and the Opposition turning a critical gaze on the banking industry. Prime Minister Turnbull has since made it a requirement for the bank chiefs to attend an annual committee hearing in Canberra. However, opposition MPs are pushing for greater action, calling for parliamentary support to force Mr Turnbull to launch a Royal Commission into the sector’s activities.
While wage growth for the rest of Australia’s occupants has dropped to its slowest pace in 18 years, the news of bank chiefs’ fattening pay packets can only add more fuel to the fire of resentment among Australians.
In May, the Australia Bureau of Statistics recorded that the wage price index, which measures salary and wage movements among Australian workers, increased by a measly 0.4 per cent during the March quarter, leaving the annual growth rate at just 2.07 per cent, after seasonal adjustments. This is the slowest pace seen since the wage price index began in 1998 and is suggestive of the ongoing struggle heralded by the 1990s recession.
With financial independence practically a pipedream for many Australians, they are left with few options when it comes to paying their way in life; many find themselves in line at the bank, applying for loans or yet more credit. And when it comes to the banks, we’ve just learned precisely where the buck stops.
Mr Narev’s $12.3 million salary is an almost unfathomable amount on the page, but if we look at it in a different light, we start to understand how ludicrous a sum it really is. When we consider that the current rate of a single full Age Pension (including Pension Supplement) is $873.90 per fortnight, we find that $12.3 million could cover the pensions of 519 retirees for a whole year. This is one man’s salary.
Amid calls for a Royal Commission into the banking sector, as Australians facing ever-growing financial dependence on banks, there’s a palpable feeling of unrest. On the one hand, bank chiefs such as Ian Narev claim to work hard in favour of Australians’ interests. On the other, they’re failing to pass on much-needed savings to customers. Until Mr Turnbull establishes a Royal Commission so that the Government and the public can learn all the facts, this feeling of uncertainty will continue.
What do you think about this amount? Does it seem reasonable considering the current climate?
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