Macquarie’s strength in global commodities trading led to the business unit head earning 75% more than the Australian bank’s chief executive after the division helped the firm achieve a record annual profit in its year finance until the end of March.
A 54% rise in net profit for the commodities business – which trades oil, gas and electricity, predominantly in North America – to AUD 6 billion ($4 billion) meant its boss Nick O’Kane saw its profit share rise to A$58 million from A$36 million the previous year.
His pay surpassed that of chief executive Shemara Wikramanayake – who earned A$33 million – for the second year in a row and even surpassed the chief executives of some of the biggest US banks.
Jamie Dimon of JPMorgan it earned $34.5 million in both the last two years and Goldman Sachs’ David Solomon was paid $25 million in 202230 percent less than the previous year.
Macquariewhose business includes asset management, retail and investment banking and commodities, reported a 10% increase in net profit for the year to A$5.2 billion as performance in commodities offset a weaker result in the core business of asset management.
The bank maintained a cautious outlook despite a second year of record profits.
Glenn Stevens, chairman of Macquarie, said the payment to O’Kane was due to the “time-honoured” profit-sharing model at the Australian firm and reflected the executive’s work in establishing the raw materials business over the last few years. two decades. “This is an exceptional year, so it’s no surprise that it’s an exceptional number,” he said.
Macquarie, which derived 71% of its profits from outside Australia during the period, derived 51% of its total profits from commodities compared with 23% from the better-known wealth management firm, which specializes in infrastructure investments.
Assets under management were up 10% to A$871 billion, but the division’s profit for the year fell 23% to A$2.3 billion, with unfavorable comparison due to negotiation of the previous year.
UBS analyst John Storey said the commodities business was the “outstanding performer” with a “buoyant” outlook for further growth. The key issue, he said, was the sustainability of the performance.
Macquarie raised its full-year dividend to A$7.50 from A$6.22 per share, but lowered its earnings paid ratio for the year to 56% from 60%.
Wikramanayake said this was due to a more cautious outlook and the need to invest in its organic growth rather than building a war chest for the deals.
“It suits us to hold the capital for defensive reasons,” he said of the decision to raise excess capital to A$12.6 billion.
The CEO declined to comment relationships that connect the company with the acquisition of the British asset manager M&G.
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