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

A bumper result for Macquarie Group’s commodities business has underpinned a full-year profit of $4.8 billion for investment group, and delivered a $35.4 million pay packet to the executive in charge of the division, Simon Wright.

The bank known as the “millionaires’ factory” on Friday released its full-year results which showed its profits surged 30 per cent, with the commodities and markets division the strongest performer.

Wright’s pay exceeded the $26.5 million awarded to chief executive Shemara Wikramanayake, one of several executives at the bank who had their profit share reduced as a form of accountability for regulatory matters at the investment giant.

Wright’s pay surged as the division he leads posted sharply higher earnings thanks to the sale of a smart meter business, while it also received a smaller benefit from the volatility on commodity markets sparked by the war in Iran.

Other parts of Macquarie also reported sharply higher profits, with its asset management arm delivering a 27 per cent jump in profit contribution, while profits in its retail and commercial banking unit rose 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.

It is not the first time the head of the Macquarie’s commodities arm has earned more than the chief executive – former executive Nick O’Kane was awarded $57.6 million in 2023.

Macquarie’s result also underlined its ongoing growth in the Australian mortgage market, where its home loan portfolio surged 28 per cent to $181.3 billion. It is the nation’s fifth-largest home lender, with 7.1 per cent of the market.

While borrowers are facing higher mortgage repayments as a result of rising interest rates, Wikramanayake said Macquarie was targeting lower-risk clients with lower loan-to-valuation ratios.

“We’re still finding we’re getting far more applications than we’re writing and we’re able to pick out the best quality credit,” Wikramanayake said in an interview.

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.

Macquarie shares were 2.1 per cent lower in afternoon trade.

Macquarie’s annual report also showed it reduced the share of profits paid to key senior leaders, including Wikramanayake, citing accountability for regulatory matters, after the bank also faced an investor backlash on executive pay last year.

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 earned last year.

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.

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