Macquarie Defers Implementing New Compensation Structure

Post by NeilMc on June 17, 2009 · Under Business News, Company News, banking · Comment 

Australian investment banking major Macquarie Group has had to defer the implementation of its new compensation plan as a result of changes to the tax code for employee share schemes.

Macquarie made the decision to delay the new pay structure after the Government ceded to pressure from trade unions and professional association and said it would change the tax plan.

Macquarie said it would consider the potential impact the change in legislation would have on its new compensation policy. The investment bank said that proposed legislation on executive termination benefits was also a reason for delaying the change.

In March Macquarie proposed to change the composition of employee bonuses, saying that it would cut the proportion of bonuses paid as cash and increase the proportion of bonuses paid in equity, which have longer vesting periods.

The proposed changes would impact 300 of the investment bank’s senior most employees including that of Chief Executive Nicholas Moore.

Macquarie had made the case that the new scheme would greater align the longer term interests of employees with that of shareholders, and when it announced the new structure said that it was more in step with global compensation trends.

The new structure was scheduled to be tabled at the firm’s annual general meeting in late July, where it would need to be approved before it could be implemented. Macquarie says that it will no longer ask its shareholders to approve the plan at its AGM.

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