The $35 million Macquarie man who out-earned his own CEO

Macquarie Group has reduced the share of profits paid to key senior leaders, including chief executive Shemara Wikramanayake, citing accountability for regulatory matters, after the bank also faced an investor backlash on executive pay last year.

The bank known as the “millionaires’ factory” on Friday released its full-year results, which showed its profits surged 30 per cent to $4.8 billion after a bumper six months to September.

Macquarie also published details of senior executives’ pay through its annual report, which showed Wikramanayake was awarded $26.5 million for the year – the majority of which was “profit share.”

The company said Wikramanayake’s fixed pay had remained unchanged at $1.5 million, and it had reduced Wikramanayake’s profit share allocation by 25 per cent, to $21 million. Wikramanayake’s pay also included $4 million in performance share units.

While Wikramanayake’s profit share was reduced, her overall pay of $26.5 million was higher than the $24 million she earnt last year.

Wikramanayake was not the highest-paid executive for the year. The annual report also showed Macquarie’s head of commodities and global markets, Simon Wright, was paid $35.4 million after profits in the division he leads surged almost 50 per cent.

For the year to March, Macquarie reported a strong performance across its various businesses, led by a 49 per cent jump in profit contribution from the division led by Wright.

Its asset management arm delivered a 27 per cent jump in profit contribution, while its profits in its retail and commercial banking unit were up 17 per cent. The investment banking division Macquarie Capital posted 43 per cent growth in profit contribution.

“Each of our businesses used its specialist expertise in navigating the current environment, identifying opportunities that support long-term growth and delivering positive outcomes for our clients and communities,” Wikramanayake said.

Macquarie shares were 1.1 per cent lower in late-morning trade.

Citi analyst Thomas Strong said the bank’s result was a “strong beat” driven by the commodities business and Macquarie Capital, and asset sales in both of these divisions.

The annual report also showed Macquarie lowered the profit share allocation of the Macquarie Bank chief executive Stuart Green, and the allocations of five other senior executives had also been reduced to reflect “proportional accountability and responsibility for relevant risk and regulatory matters in which their groups were involved.” Green was awarded $8.4 million in pay.

The decision to reduce profit share for some executives comes after Macquarie last year copped a historic “first strike” on pay when more than 25 per cent of investors voted against the remuneration report.

During the year, Macquarie was also sued by the corporate watchdog for allegedly failing to properly report at least 73 million short sales over 15 years. It also agreed to compensate victims of the collapsed Shield Master Fund after financial planners used Macquarie’s platform to put people’s super savings into the scheme.

“The board acknowledges the reputational and financial impact of risk and regulatory matters arising during the year, including the short-sale transaction reporting and Shield Master Fund matters and the accountability of the CEO and relevant executive committee members for these shortcomings, as reflected in remuneration outcomes,” Macquarie’s annual report said.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.