The outgoing boss of Macquarie Group is heading to retirement with at least $375m in company shares after nearly 40 years at the organisation.
Shortly before its annual general meeting on Thursday, the finance giant announced chief executive Shemara Wikramanayake would be retiring in November, after nearly four decades.
Ms Wikramanayake’s total salary was just shy of $30m last year, putting her fifth on the list of Australia’s highest paid chief executives.
But she also directly owns 1,474,481 company shares, which recently traded at price of a$254.93, this direct holding is valued at more than $A375 million.
In addition to her direct shares, she retains 378,091 restricted share units and 62,106 performance share units. That would add tens of millions to her package.
One shareholder questioned pay packets for executives and suggested one of the meeting agenda items was redundant given Ms Wikramanayake’s retirement.
“I would have thought that given that Shemara is retiring, that we wouldn’t need to put resolution four … normally when CEOs go, you might pull the bonus item (on the agenda),” the shareholder told the AGM.
“I mean Shemara’s got 370 million bucks of shares, never sold one, doesn’t need the cash obviously.”
Macquarie chairman Glenn Stevens said Ms Wikramanayake had “well and truly earned” her pay packet.
Answering further, Macquarie chief financial officer Frank Kwok said staff being large shareholders in the company was a good thing.
Staff were subject to trading windows, which most recently opened after full-year results were delivered in May.
Macquarie announced the chief executive’s retirement hours before a tense annual general meeting was scheduled to kick off.
Macquarie informed the Australian Stock Exchange on Thursday morning that
after eight years in charge Ms Wikramanayake, 64, retire and be succeeded by the group’s head of banking and financial services, Greg Ward.
“Over her last eight years as CEO, and for almost four decades with the company, Shemara has steered Macquarie through expansion into new markets, the dislocation of the Covid pandemic, and significantly enhanced recognition of our brand and the value we bring to global clients and communities,” Mr Stevens said in the statement to the ASX.
The company used a 2018 shareholder meeting to announce Ms Wikramanayake’s appointment.
Macquarie dodged a second strike on its remuneration report which would have sparked a board spill.
Proxy votes saw the pay packet and director reappointment agenda items carried.
Shareholders also asked dozens of questions about KPMG’s expectant appointment as auditor.
A climate disclosure motion was voted down.
A collective of more than 160 shareholders, including large US pension funds, grilled company leadership over fossil fuel investment.
“Investors are highly concerned to see Macquarie pouring hundreds of millions of dollars into one of the biggest proposed gas fracking operations in the world, the Beetaloo Basin, supercharging climate impacts including more severe bushfires, cyclones and floods,” Market Forces policy analyst Morgan Pickett said ahead of the meeting.
“Despite last year’s 35 per cent vote in favour of clearer climate action, Macquarie has failed investors by radically increasing its support for fossil fuel expansion.”
The banking and asset management giant needed to explain its “contradictory position” of funding “massive new fossil fuel projects”, “while claiming to back the Paris Agreement and a safe climate”, he said.
The cohort hot on Macquarie’s fossil investments include the Australian Security Leaders Climate Group.
Group executive member Ian Dunlop was in a past life a senior executive at Shell and chair of the Australian Coal Association.
“I’m sounding the alarm: Macquarie is making a grave error, treating a 3°C world as a business opportunity to justify more fossil fuel finance rather than a catastrophe that must be avoided,” Mr Dunlop said ahead of the meeting.
“Macquarie Group must recognise that financing new fossil fuel projects will have unacceptable impacts for the company, global economy and security of peoples across the world for generations.”
Climate scientist John Church said Macquarie’s actions were inconsistent with climate science and amounted to greenwashing.
“Macquarie is ignoring the science with its actions that are in direct contrast to what is required by the Paris Agreement,” he said.
Mr Pickett, Mr Dunlop and Mr Church all reiterated their concerns by way of questions at the meeting.
Scrutiny over Macquarie exec pays
Macquarie was hit with a first strike at last year’s AGM as 25 per cent of shareholders voted against the remuneration report.
The Australian Shareholders’ Association voted against the remuneration report on Thursday, but not enough shareholders joined them to record a second strike and a board spill.
Mr Ward will succeed Ms Wikramanayake in November, subject to approvals.
Ms Wikramanayake said “the great privilege” of being the chief executive was “empowering Macquarie’s talented team to perpetuate our unique culture of identifying opportunities and taking accountability for delivering on them to drive sustainable, positive outcomes for our stakeholders”.
“Looking forward, I take confidence in the strength of the team, and particularly in Greg’s ability to build on the legacy of our six decades of history,” she said.
“We have worked together for 30 years, and his track record, leadership and integrity make him an excellent candidate to be Macquarie’s next CEO.”
Mr Ward has been with Macquarie since 1996.
“I’m honoured to be asked by the board to succeed Shemara as Macquarie CEO,” he said.
“Shemara leaves Macquarie incredibly well positioned, with each of our businesses performing strongly.
“I look forward to working with the Board, management and our entire Macquarie team to build on Shemara’s legacy for the benefit of all of our stakeholders.”
Macquarie also posted quarterly results on Thursday morning, covering the three months after March 31.
Banking and financial services deposits have grown 4 per cent over the quarter to $223.3bn, mortgages are up 6 per cent, and business loans were up 3 per cent.
The company’s commodities and global markets divisions posted a substantially higher net profit contribution than the prior corresponding period. The investment banking unit’s net profit contribution also grew, though asset management profit contribution shrunk.
In May, Macquarie posted a full-year $4.85bn profit, up 30 per cent.
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