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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.
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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.
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