NAB (ASX: NAB) chief executive Andrew Thorburn has taken a $2 million pay cut as the bank admitted to "failures" in its treatment of customers which have "impacted NAB's reputation" which was revealed at the banking royal commission.
Thorburn's remuneration was slashed by more than 30 percent from $6.5 million to $4.37 million as the bank admitted it had treated its customers poorly.
"The group CEO has accepted accountability for NAB's failure to fix mistakes quickly, remediate customers promptly and set things right," says NAB remuneration committee chairman Anne Loveridge.
"These failures have impacted NAB's reputation.
"The board considers that customer, risk and reputation matters, many of which have featured in the royal commission, should have been dealt with better and faster.
"The board considers that the executive leadership team needs to do more, individually and collectively, to ensure that NAB always 'does the right thing' by its customers."
Thorburn's pay cut was the largest among the big four bank chief executives.
NAB executive bonuses fell by $114 million on the previous year because of the disastrous publicity from the banking royal commission and Loveridge says a new remuneration structure will be put in place that 'more closely aligns executives' interests with that of shareholders".
"We accept that traditional incentive schemes have contributed to a focus on short-term financial outcomes in the financial services sector," Loveridge says.
"This does not serve the best interests of customers, shareholders or NAB itself."
Mr Thorburn's pay cut means he is no longer the highest paid member of staff at NAB.
Chief technology and operations officer Patrick Wright pocketed $4.4 million while former NSW Premier Mike Baird was paid $2.65 million for his first full year in charge of NAB's consumer unit.
That was seven times the $377,780 he was earning before he suddenly resigned as NSW premier in January 2017.
Business News Australia
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