In a review of documents released to coincide with the company’s annual general meeting later this month, Pension and Investments Research Consultants (PIRC) said the maximum potential awards for incoming group chief executive Michael Cameron may have become “excessive”.
Mr Cameron took up the top job in April 2015, replacing outgoing chief executive Patrick Snowball.
“Maximum potential awards for the CEO under all incentive schemes may become excessive as awards under the long term incentive schemes are not individually capped,” PIRC’s review said.
“These concerns are confirmed by the fact that the CEO total realised variable remuneration was 385 per cent of fixed remuneration in the year under review.
“Concerns are raised as the Company uses one performance condition for LTIP awards contrary to best practice… Based on [these] concerns expressed… an ‘oppose vote’ is recommended.”
Examining the proposed grant of performance incentives for Suncorp’s chief executive, the consultancy firm has also encouraged shareholders to pass an ‘oppose vote’.
“Approval is sought for the grant of performance shares to the value of [$3 million] under the Suncorp Group Equity Incentive Plan, to the incoming Managing Director and CEO of the Company,” the review said.
“Awards will be subject to one performance measure (relative TSR), which contravenes best practice as multiple performance metrics, including non-financial indicators, should be used interdependently.”
Reflecting on Suncorp’s board representation, PIRC said while incumbent chairman Ziggy Switkowski is “not considered independent” due to his time on the board, there is “sufficient independent representation” on the board and PIRC recommended shareholders pass a ‘for vote’ in favour retaining him.
Suncorp would not comment on the report.
PIRC was created by pension funds in 1986 and reviews corporate governance in the UK. According to its website, it is independently-owned and “works only for investors”.
The issue of a CEO paid based on performance of the company that he runs. The incoming CEO has no direct insurance or to a lesser banking knowledge for this Bancassurance. GPT is a property trust. The issue of bringing low risk customers asking for home loans or to bring money via investment products to the bank or to a lesser extent the General/ Life Company via cross selling is the number one priority for Suncorp. Nesbitt has to get punters through the doors in his Sydney branches, the people that work there are sitting on their hands. The issue of the bad loans, sold to Goldman Sachs is now a fading memory, how much Suncorp lost will never been known except to the ATO and Suncorp bank Finance, if they run shadow ledgers and claim the loan expense losses. It is known that people will get into bed with certain business in order to write new business, ie. Commission. The issue of sales in Financial Services has cost all the 4 major banks lots of pain and dollars. CBA has $50 -250 million dollar liability. NAB have liabilities of 1.5 Billion dollars for the UK arm.
The STORM was foretold in 2006. The lifecycle of the Financial Services Industry in Australia and Overseas.
Kind regards,
Adrian Totolos.
Business Analyst.