CBA seeks stamp of approval for Narev's $4.3m bonus
Commonwealth Bank shareholders will be asked to approve a bonus of up to $4.28 million for chief executive Ian Narev at the bank's annual meeting next month.
The payment would be made under the bank's leadership reward program, which it says is designed to "focus the efforts" of the bank's most senior staff.
Exactly how much Mr Narev gets will depend on the bank's performance compared with that of Australia's 20 largest listed companies over the next four years, and its customer satisfaction ratings. It will be paid after June 2017.
The country's biggest bank disclosed the grant of up to 62,966 award rights in a letter to shareholders in advance of the AGM in Adelaide next month.
It comes after Mr Narev was paid a total of $7.8 million last financial year, his first full year in the job.
The bank said the reward scheme, available to top executives, was intended to "focus the efforts of participants to support superior shareholders' returns and customer satisfaction".
"Reward rights entitle Mr Narev to receive shares or a cash equivalent, as determined by the board, subject to vesting criteria including the satisfaction of performance hurdles. The reward rights will be granted at no cost to Mr Narev."
The notice to shareholders said 75 per cent of the reward would depend on Commonwealth Bank's total shareholder return compared with other stocks in the ASX 20. If the bank was in the top quarter, this component of the bonus would be paid in full. If the bank's performance was in the middle of the group, Mr Narev would get half of this portion of the payment.
The remaining 25 per cent of the reward would depend on the bank obtaining the top customer satisfaction ratings, on average, across its varied customer base.
Mr Narev has received less in total remuneration than his rivals at Westpac, ANZ and NAB.
Shareholders last year approved the granting of up to 78,681 reward rights to Mr Narev, and the board is recommending shareholders vote in favour of this year's bonus.
In the year to June, Commonwealth Bank shares rose 29 per cent and it lifted total dividends by 9 per cent to $3.64.