SYDNEY - Macquarie Bank chairman David Clarke says changing the bank's remuneration policy would destroy its profitability.
Clarke was responding to shareholder criticism of Macquarie's large remuneration packages at the bank's annual general meeting in Sydney.
"I think it would be a legitimate community issue to have a
debate about investment banks' remuneration," he said.
"But it's no good pretending that we can introduce an essentially different remuneration system and retain our people.
"If we want to blow up the bank, that's the quickest way I can think of doing it."
While several shareholders expressed their concern about the size of the packages, many shareholders at the meeting voiced their approval of Macquarie's controversial remuneration policy.
An ex-employee of the bank said lower salaries generally paid by Australian companies were causing an exodus of talent to overseas markets.
In addition, an ex-Macquarie Bank analyst said Macquarie's share price wouldn't have experienced its meteoric rise if the bank hadn't offered competitive performance bonuses to its people.
Shareholder activist Stephen Mayne called on the bank to release proxies for the vote on the adoption of the remuneration report, before the end of the meeting, so shareholders could assess the influence of Institutional Shareholder Services' (ISS) decision to oppose the remuneration report.
ISS has been encouraging Macquarie's major shareholders to oppose the report on the condition that too large a proportion of the performance bonuses paid to executives are based on short-term performance.
But Clarke insisted the proxies should not be shown until after shareholders at the meeting had tendered their votes so as not to influence their decision.
Results of the proxy vote showed 21.4 per cent opposed the resolution to approve the remuneration structure, with 75.7 per cent in favour. A total of 2.9 per cent of shareholders abstained.
- AAP
