There's a big gap between the pay of ANZ Bank New Zealand boss David Hisco and his counterparts at two of the other big four Australian-owned banks.
The comparison can be made now ANZ, Westpac Banking Corp and Bank of New Zealand have filed their annual reports for the year while ASB follows a different reporting period. In any event, ASB doesn't publish the remuneration of its New Zealand chief executive Barbara Chapman, who has been outspoken on the need for pay equity.
ANZ CEO David Hisco is the highest-paid boss for a bank of any other company in New Zealand, having gained an 11 percent rise in total remuneration in the 2014 financial year to A$4.22 million ($4.63 million). By comparison, the heads of the nation's two biggest companies, Fonterra Cooperative Group's Theo Spierings and Fletcher Building's Mark Adamson, made $3.5 million and $3.3 million respectively.
The annual report showed Hisco earned base remuneration of A$1.65 million, an additional A$1.15 million of cash under a short-term incentive and A$1.05 million in deferred equity.
That compares to the A$2.67 million total remuneration earned during the financial year by former Westpac chief executive Peter Clare, who resigned in August after recovering from heart surgery. That was a 4.5 per cent drop from the previous year when he earned A$2.78 million, as the share component of his package was a lot higher. This year he got fixed remuneration of A$1.06 million plus A$1.61 million in deferred equity.
Well under those two comes BNZ boss Anthony Healey who has only been in the top job since August when Andrew Thorburn left to take over the CEO role of the Australian parent, National Australia Bank. Healey earned A$765,000 for the year, including A$372,692 in fixed remuneration.
ASB's Chapman, who took over the reins in 2011, was paid A$2.2 million that year which was mostly attributable to her previous role as Commonwealth Bank of Australia's human resources head, but her current wage has not been disclosed.
The pecking order for bank CEO pay is different in the parent companies with Westpac's out-going chief executive Gail Kelly the highest-paid on A$12.8 million. ANZ's Mike Smith sits behind her on A$10.4 million while Ian Narev, the boss of ASB's parent, CBA, earned A$8 million, and NAB's Thorburn brings up the rear on total remuneration of A$3.19 million.
Westpac has said Kelly's replacement, Brian Hartzer, won't be paid as much as her but he had the second highest sign-on in history at around A$10 million when he joined two years ago. The Sydney Morning Herald reported that the rough rule of thumb when it comes to banks is that the full remuneration package is typically 3 to 3.5 times that of the fixed pay. Hartzer is starting the CEO role on a fixed pay of A$2.65 million, more than his counterparts but around what Kelly started on.
The hefty pay packets of the banks' top executives are out of whack with what ordinary bank workers earn, said First Union general secretary Robert Reid. The union represents around 3,000 finance sector workers and has collective agreements with three of the big four banks.
Reid said the average wage for a customer service representative, typically the people who customers deal with, is around $45,000 a year at Westpac, up to $43,000 at ANZ if the current offer is taken up by staff who have been on strike over new employment agreements, and between $43,000 to $45,000 at BNZ.
Reid claims bank staff are also coming under increasing pressure to sell financial products rather than provide service.
"We have three lawyers in this union and two of them are working full time on dealing with bank staff who have had warnings over failing to meet sales targets that the CEO bonuses are based on," he said.
This financial year all of the big four New Zealand banks reported increases in cash earnings, their preferred measure as it removes volatility. ANZ's cash earnings were up 17 percent to $1.68 billion, Westpac's rose 13 percent to $864 million while BNZ was up 2.4 percent to $807 million, and ASB's cash earnings rose 11 percent to $776 million.
