Aug 6 (Reuters) - Australia's No. 4 lender Australia and New Zealand Banking Group on Tuesday said here it will scrap individual bonuses for most of its employees after a powerful inquiry identified a culture of greed at the country's top financial institutions.
The move underlines the lender’s efforts to change its culture after the government-backed inquiry known as a Royal Commission found that flawed incentives led to wrongdoing.
“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 Officer Shayne Elliott said.
“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,” Elliott added.
From October 1, 2019, individual bonuses will be replaced by a group performance dividend, which will be determined by the lender’s performance across a variety of factors, the lender said.
However, the changes would exclude certain top executives who play a major role in deciding the bank’s performance, ANZ said.
Last year, the lender said here it would stop paying bonuses to financial planners for selling its products.
The subject of executive pay has also attracted the attention of the country’s prudential regulator which last month said it intends to prescribe stricter terms on compensation policies to enhance accountability.
Reporting by Aditya Soni in Bengaluru; Editing by Stephen Coates