Macquarie shareholders challenge executive pay as regulatory, earnings stress mount
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Macquarie shareholders challenge executive pay as regulatory, earnings stress mount
Macquarie Group (MQG.AX) said on Thursday it will review its executive compensation following a regulatory compliance lawsuit. Shareholders appeared to vote against its salary plans for the first time at its annual meeting. The investment bank also announced that its chief financial officer was retiring, a surprise development which takes out one possible successor to current leader Shemara Wikramanayake. Macquarie shares were nearly 5% lower by midsession, compared with a flat overall market (.AXJO) , as investors fretted about the multiple headwinds facing the company. The rethink of its top-level pay reflects an unusual degree of investor pushback against a company nicknamed the millionaire factory due to its compensation as heightened regulatory scrutiny and weaker earnings at some of its global businesses stoke disquiet among shareholders. The company did not disclose specific profit figures in the limited trading update, but said profit in the three months to June was lower than a year earlier.
Item 1 of 2 Macquarie Group Chief Financial Officer (CFO) Alex Harvey poses on the day they announced their annual profit in Sydney, Australia, May 9, 2025. REUTERS/Hollie Adams/File Photo
Summary
Companies Macquarie says shareholders vote against executive pay
Company may change pay systems after regulator intervention
CFO, a possible CEO successor, unexpectedly leaves
Shares down 5%
SYDNEY, July 24 (Reuters) – Macquarie Group (MQG.AX) , opens new tab , employer of Australia’s best-paid CEO, said on Thursday it will review its executive compensation following a regulatory compliance lawsuit as shareholders appeared to vote against its salary plans for the first time at its annual meeting.
The investment bank also announced that its chief financial officer was retiring, a surprise development which takes out one possible successor to current leader Shemara Wikramanayake who started in 2018, and reported a dip in first-quarter profit, pushing its shares lower.
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The rethink of its top-level pay reflects an unusual degree of investor pushback against a company nicknamed the millionaire factory due to its compensation as heightened regulatory scrutiny and weaker earnings at some of its global businesses stoke disquiet among shareholders.
Cooling M&A activity and relatively subdued oil and gas markets have squeezed profit at two of its four main operating units.
Adding to the pressure on the investment bank, the Australian corporate regulator sued Macquarie in May accusing it of misreporting up to 1.5 billion short sales. Macquarie has said it picked up and reported the mistakes and is reviewing ASIC’s claim.
“It was always likely that there were going to be some observers who were going to say ‘you should have gone more one way or the other’,” Macquarie Chair Glenn Stevens told media before the annual meeting in Sydney.
“I find it a little bit disappointing how many feel that, but it is what it is and we have to hear that message,” Stevens, who was Reserve Bank of Australia governor from 2006 to 2016, said.
At the meeting, Stevens told shareholders the “remuneration impacts … will be an FY26 matter, about which the board will come to a view over the period ahead”.
CEO Shemara Wikramanayake earned A$30 million in 2024, making her the highest paid chief executive among ASX 100 companies and the only woman in Australia’s top 20 highest paid executives, according , opens new tab to the Australian Council of Superannuation Investors.
Proxy advisors to Macquarie shareholders recommended voting about 25% against the company’s remuneration report, according to slides presented at the meeting, although Stevens said the company would publish a final result later.
If more than 25% of shareholders vote against an Australian company’s remuneration report for two years running, shareholders can hold another vote on whether to dismiss the entire board.
Macquarie shares were nearly 5% lower by midsession, compared with a flat overall market (.AXJO) , opens new tab , as investors fretted about the multiple headwinds facing the company.
Macquarie said profit in the three months to June was lower than a year earlier due to lower contributions from its asset management arm and commodities and global markets unit. The company did not disclose specific profit figures in the limited trading update.
“We see (Macquarie) as a great business caught in the midst of both its own transition and global realignment of geopolitical alliances and capital flows,” said Jarden analysts in a client note.
CFO Alex Harvey, asked by media to elaborate on his departure, said only that he had achieved what he set out to do and it was time to promote his deputy Frank Kwok.
CEO Wikramanayake, asked about her future in the role, said: “I’m committed to Macquarie for as long as Macquarie needs me.”
Reporting by Roushni Nair and Sneha Kumar in Bengaluru, and Byron Kaye and Scott Murdoch in Sydney; Editing by Mohammed Safi Shamsi & Shri Navaratnam
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