Macquarie cuts bonuses

Macquarie, the Australian bank funding broker bouyouts in the UK has been forced to radically slash its bonus payments in the face of criticism at home and world trends.

It said:

• Profit share paid out in cash will be reduced and the percentage of retained profit share will be increased.
• For the CEO the cash component of profit share will fall from 70% to 45%. 55% of profit share will be retained. Accordingly, approximately 60% of overall compensation (including options) will be retained.
• For other members of the executive committee the cash component of profit share will fall from 60% to 50%. 50% of profit share will be retained. Accordingly, approximately 55% of overall compensation (including options) will be retained.
• For other EDs, the cash component of profit share will fall from 80% to 50%. The remaining 50% will be retained in the form of fully paid ordinary Macquarie shares and Macquarie-managed fund equity. EDs will not receive future option grants. Accordingly, on average the amount of retained overall compensation will increase from 38% to 50%.

Bloomberg claimed Australia’s government is seeking to restrict executive salaries and severance payments after reports of companies giving managers raises while firing workers stoked public anger.

It said Macquarie was dubbed the “Millionaire’s Factory” during a 16-year run of rising profits, but has cut about 1,000 jobs since September and its stock slumped 62% in 2008.

“Relative to the returns they were extracting, which this crisis has revealed weren’t sustainable, they were taking more than their fair share,” said Tim Morris, an analyst at Wise- Owl.com in Sydney. “Now that things have turned sour, people are angry because the executives aren’t going to pay for that, it’s the shareholders that suffer.”

In a report this month measuring executive pay relative to performance among Australia’s 50 biggest publicly traded companies, Wise-Owl said Macquarie “trumps the list” Bloomberg reported.