Strategic CIO // Executive Insights & Innovation
Commentary
9/17/2010
02:14 PM
Bob Evans
Bob Evans
Commentary
50%
50%

Big Payday For CIO: $4.2 Million

Hey, who wouldn't like a 52% pay hike in this economy? That increase for Commonwealth Bank of Australia CIO Michael Harte is even more sweet because it builds on his old pay package of $2.8 million and brings his current comp plan to $4.2 million. CBA's CEO said Harte's technology leadership was "a very significant catalyst" in the bank posting record annual profit of $5.66 billion.

Hey, who wouldn't like a 52% pay hike in this economy? That increase for Commonwealth Bank of Australia CIO Michael Harte is even more sweet because it builds on his old pay package of $2.8 million and brings his current comp plan to $4.2 million. CBA's CEO said Harte's technology leadership was "a very significant catalyst" in the bank posting record annual profit of $5.66 billion.From a news article in theaustralian.com:

Long-term incentive payments were the largest contributor to Mr Harte's soaring wages, with more than $2m in share payments awarded. Incentive payments amounted to $515,885 in the previous year.

A CBA spokesman said the issue of share payments was contingent on performance targets being met over the next few years. "These awards may or may not vest, dependent upon the group's future performance," he said.

Mr Harte received short-term cash incentives totalling $1.16m, although half of that is deferred for one year. His cash salary was $970,037 . . . .

In another recent article about CBA, theaustralian.com reported that Australia's largest bank defied common practice by accelerating its spending on IT during the global financial downturn as Harte's team purchased $1 billion in IT products and services for the 12 months ending in June 2010, up 12% from the previous year.

"The Commonwealth Bank of Australia continued to invest heavily in technology during the GFC [Global Financial Crisis], giving it a 'clear and distinct advantage' over rivals," the second article said.

This second article describes in detail CBA's extensive project to modernize its IT infrastructure to allow real-time banking, which the company said was becoming essential for upholding customer satisfaction.

It quotes CEO Ralph Norris as saying, "We have a lot of issues and problems around the fact that different parts of our system . . . see different account balances which leads to a lot of queries from customers and puts quite a bit of demand on our call centres."

The massive overhaul led by Harte will eliminate those concerns, Norris said in the article. "We'll see that reduced to nothing because the system will be real-time . . . every time the transaction hits, it will hit the account immediately and that's not the case today."

And if you really want to find out more about how a CEO can earn a 52% pay hike on top of a previous package of $2.8 million, a third article about CBA says its retail-banking operation is on the verge of becoming the most efficient in the world:

The improved technology will help the retail bank of CBA, Australia's largest bank by market capitalisation, slash its cost-to-income ratio from 39.6 per cent to 35 per cent in the next three to five years.

The target would make the bank the most efficient retail bank in the world, with Spain's Banco Santander currently operating on a ratio of 36 per cent.

CBA has managed to keep a tight cap on costs in recent years, with its retail cost ratio steadily falling from 47 per cent four years ago to 42.9 per cent last year, before edging down to the current level. The retail business recorded expenses in the past year of $2.79 billion.

RECOMMENDED READING

Global CIO: Larry Ellison's Top 10 Priorities At Oracle Open World

Global CIO: Is IBM Or Apple The World's #1 Tech Brand?

Global CIO: Larry Ellison's Acquisition List: Who's #1?

Global CIO: IBM And Oracle Expose Hewlett-Packard's Achilles' Heel

Global CIO: Larry Ellison And Mark Hurd: The Job Interview

Global CIO: Resurrecting Mark Hurd: Larry Ellison's War With IBM

Global CIO: In Hurd's Wake, An Ugly Ending For Oracle's Charles Phillips

Global CIO: Burying Mark Hurd: Hewlett-Packard And Its Future

Comment  | 
Print  | 
More Insights
The Business of Going Digital
The Business of Going Digital
Digital business isn't about changing code; it's about changing what legacy sales, distribution, customer service, and product groups do in the new digital age. It's about bringing big data analytics, mobile, social, marketing automation, cloud computing, and the app economy together to launch new products and services. We're seeing new titles in this digital revolution, new responsibilities, new business models, and major shifts in technology spending.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest, Dec. 9, 2014
Apps will make or break the tablet as a work device, but don't shortchange critical factors related to hardware, security, peripherals, and integration.
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on InformationWeek.com for the week of December 14, 2014. Be here for the show and for the incredible Friday Afternoon Conversation that runs beside the program.
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.