Macquarie’s commodities boss paid more than CEO as profits soar

{"text":[[{"start":7.55,"text":"The head of Macquarie Group’s commodities and trading arm was paid more than the chief executive last year after profits at Australia’s “millionaires’ factory” surged."}],[{"start":18.3,"text":"Simon Wright was awarded A$35.4mn ($25.5mn) for the year to March after profit at his division soared 49 per cent, propelled by asset sales and volatility in the energy markets. The trading executive replaced Nick O’Kane in 2024."}],[{"start":37.5,"text":"That was more than the A$26.5mn paid to chief executive Shemara Wikramanayake for the year. Ben Way, head of Macquarie’s asset management arm, was paid A$24.1mn, according to the company’s annual report released on Friday."}],[{"start":54.2,"text":"The total pay for a number of executives at Macquarie reflected reductions applied to their profit share following regulatory investigations and fines that overshadowed its annual meeting last year, when the company suffered a protest vote over its pay policies."}],[{"start":69.15,"text":"Wikramanayake’s performance-based pay was reduced by A$7mn, while Wright’s was lowered by A$1.7mn as a result."}],[{"start":79.85000000000001,"text":"Chair Glenn Stevens said on a media call that investors had not been happy with how Macquarie had handled its pay structure last year amid the regulatory issues and it had responded by making more disclosures about pay adjustments. “We believe this strikes the right balance between incentive, [shareholder] alignment and accountability,” he said. "}],[{"start":99.5,"text":"Macquarie’s profit-share model, which rewards executives with huge sums if investments they lead produce good returns, has come into focus in recent years as some of its top leaders have benefited. O’Kane was paid A$58mn in 2023 before he left to join Mercuria. "}],[{"start":117.6,"text":"Shares in the Australian asset manager and banking group opened 5 per cent higher on Friday before slipping into negative territory, after the company reported a 30 per cent rise in annual net income to A$4.9bn."}],[{"start":131.4,"text":"The performance was driven by strong profit growth across all of Macquarie’s divisions, including a 27 per cent rise at its asset management arm, 17 per cent at its banking unit and 43 per cent at its investment advisory division."}],[{"start":null,"text":"

"}],[{"start":145.4,"text":"However, its commodities and global markets arm led the way due to the sale of a smart metering business in the UK, higher levels of asset financing and higher income related to client hedging activity in the global gas, oil and power markets. "}],[{"start":160.5,"text":"The commodities trading business benefits when energy markets are volatile due to higher demand for gas and oil supply and hedging by customers. "}],[{"start":169.4,"text":"The unit delivered record profits after Russia’s invasion of Ukraine, which resulted in huge payouts at the company dubbed the millionaires’ factory due to its profit-share pay structure. Macquarie’s net income hit a record A$5.2bn in 2023 as the commodities division reaped huge benefits from volatility in the energy markets. "}],[{"start":189.1,"text":"Analysts had forecast a strong performance for the commodities unit following the energy crisis triggered by the US-Israeli war with Iran, as well as storms that hit the US earlier this year. "}],[{"start":199.85,"text":"Wikramanayake said that there had been a rise in hedging and trading in the energy division but that the gain was relatively small in the broader scale of Macquarie’s four operational lines.  "}],[{"start":210.54999999999998,"text":"She highlighted a rise in return on equity to 14 per cent, up from 11 per cent in the previous year, and said Macquarie was “well positioned to deliver superior performance in the medium term”. "}],[{"start":221.54999999999998,"text":"Wikramanayeke said that the market turmoil since February had not yet resulted in “huge dislocation” in markets where it would look to invest. "}],[{"start":229.85,"text":"Matthew Wilson, an analyst with Jarden, said the performance reflected a more targeted strategy. “Macquarie has transitioned the portfolio to be front and centre a new paradigm of growth,” he said in a note. “All divisions [are] now headed in the right direction.”"}],[{"start":251.1,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1778219717_8438.mp3"}