With AGM activism at an all time high and remuneration committees reeling, the multi-million dollar performance bonuses for the Big Four bank CEOs have got to be about as popular as a lunchtime ATM queue.
It’s hard to have any sympathy at all for the major banks — despite slumping share prices the Big Four have been bouyed by the Rudd government’s deposit guarantee which has helped to eliminate pesky competition from non-bank lenders. But bubbling away in the background is the issue of CBA CEO Ralph Norris’ looming $11.56 million customer service performance bonus, announced in last year’s notice of AGM under something called a “Group Leadership Share Plan”.
Norris will take home the bounty if the Commonwealth is “number 1 in service” by June 30th 2010, as measured by this performance matrix detailed on Ian Rogers’ The Sheet last year, provided the bank meets other hurdle requirements related to net profit compared with rival lenders. This comes after Norris’ current $8.66 million annual salary package leaped 30% in the middle of the credit crunch. Now, as the following documents reveal, it seems the Commonwealth is determined to make sure big Ralph gets over the line in 18 months time by aligning its internal benchmarks with Norris’ personal performance plan.
Let’s defer to the team from Commonwealth Sales and Service Support:
It’s amazing what an $11 million incentive will do to drive internal change (and no, we don’t know what “TOFU” is either). As you can see, the date ‘June 2010′ is given heavy emphasis, corresponding eerily with Norris’ bonus d-day. To be fair, Norris was hired to turn the CBA’s woeful customer service rating around after a successful push at his previous bank, New Zealand’s CBA-owned ASB, helped boost its bottom line. Ironically, CBA’s profits could be hit if Norris decides to reinstate personal service — the gutting of tellers helped raise revenue in the first place. And customers are still rebelling over exit fees charged on fixed rate homeloans, as last night’s A Current Affair revealed, with one victim labelling the bank “scum and vermin”. Negative perceptions broadcast to 1 million viewers nationally matter, despite the questionable personal histories of ACA’s interviewees who probably should have known what they were getting themselves in to.
The Commonwealth was lightning quick to pass on the RBA’s 1% cut to official interest rates yesterday, with Wayne Swan interrupting question time to relay the good news. But Ralph Norris may have to dig even deeper into his bag of tricks to quell the internal fallout from his latest customer service putsch, well before customers notice the frontline effects.
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