ANZ has removed performance-related individual bonuses from staff below executive level, which it says will improve the bank’s treatment of customers.
ANZ will still pay about $4.75 billion in personnel costs but from October 1 the only bonus available to most staff will be a so-called group performance dividend, which will be calculated using risk, financial, customer, people and reputation considerations.
The move represents one of the 16 key initiatives ANZ announced in February in an initial response to the financial services royal commission’s 76 recommendations.
“The royal commission rightly shone a light on the negative impact the over emphasis on individual bonuses within a bank can have on customers and the community,” chief executive Shayne Elliott said on Tuesday.
“We are taking action to rebalance the way we pay people so that variable remuneration is a smaller part of our people’s take home pay with these reduced bonuses to be determined by the overall performance of the bank.”
Mr Elliott insisted the bank remained committed to a high-performance culture, but that removing individual incentives would improve collaboration across the business and benefit customers, shareholders and the broader community.
The potential conflict of interest between customer wellbeing and staff incentives came under severe scrutiny at last year’s royal commission.
A small percentage of senior staff are exempted due to the nature of their roles, and the changes do not apply to the executive team, whose total pay fell after a year of declining profits, a falling share price and industry-wide reputational damage.
ANZ nonetheless followed rivals NAB and Westpac in copping a first strike on executive pay, with about a third of shareholders voting against the lender’s executive remuneration report at December’s annual general meeting.
Shares in ANZ were worth $27.31 before the start of trade on Tuesday, with the ASX futures suggesting a sharp overall sell off in store.