(Adds details of plan)
By Aditya Soni
BENGALURU, Aug 6 (Reuters) - Australia and New Zealand Banking Group said here on Tuesday it will scrap bonuses for about four-fifths of its staff, excluding top management, after a powerful inquiry identified a culture of greed at Australia's top financial firms.
The move marks an overhaul of its compensation structure by Australia’s No. 4 lender after the government-backed inquiry, known as a Royal Commission, found that flawed incentives led to misconduct.
“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 for about 80% of employees 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.
The changes exclude about 20% of executives who play a major role in deciding the bank’s performance, and whose remuneration structure will continue to include an ‘at risk’ bonus, ANZ said.
The bank’s annual remuneration spend will not change, it added.
Last year, the lender said here it would stop paying bonuses to financial planners for selling its products.
The subject of pay for top executives 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; Additional reporting by Paulina Duran in Sydney Editing by Stephen Coates and Muralikumar Anantharaman)