Bank chiefs' pay ridiculous - union

MONEY MAN: Westpac NZ chief executive Peter Clare.
MONEY MAN: Westpac NZ chief executive Peter Clare.

Westpac New Zealand chief executive Peter Clare is making about 60 times more a year than the average bank teller, and that is "out of sync" with the reality for most workers, according to a bank union.

Clare's total pay package is up almost 11 per cent in the past year to A$2.97 million (NZ$3.8m), though part of that pay increase appears to be relocation costs for moving across the Tasman from Australia, with a one-off non-cash benefit of about A$158,000.

At NZ$3.8m a year, Clare earns the equivalent of NZ$10,410 a day, including weekends.

That is well behind the A$26,300 a day received by Gail Kelly, chief executive of parent company Westpac group.

The average bank worker makes about $50,000 a year, less than Clare makes in a week, and unions are in talks with Westpac seeking a wage rise of about 4 per cent.

As reported earlier this month, Westpac's NZ profits surged 22 per cent to $707m after tax in the year till September 30, largely driven by a chunky $50m reduction in bad debts and strong balance sheet growth.

First Union's finance sector secretary, Andrew Casidy, said executive pay at the banks was ridiculous and clearly "out of sync with the vast majority of workers".

At about 60 times the average bank worker's pay, chief executive pay was vastly different from what it was 30 years ago, Casidy said.

"It is simply unsustainable, [in terms of] income inequality, good society and good economic principles," he said.

A recent report showed leaders of New Zealand's listed companies made 22.5 times their average worker's pay in 2011, with an average pay of $1.44m.

The Warehouse chief executive made about 60 times the average worker's wage in the retail chain, with Telecom's chief on more than 50 times the average last year.

The pay rises for bank executives "far outstripped" those of average workers, Casidy said, leading to "gross income inequity".

That was at the heart of the "Occupy" movements in New York, London and in New Zealand last year.

"There are too many with too much money and too many with nowhere near enough," Casidy said.

Banks were making good money in New Zealand and should spread some of it around with higher pay rates for staff, and to customers through lower fees and interest rate margins, he said.

In the past, bank workers were considered well rewarded but these days workers often came to the union about the high costs of public transport and high winter heating bills - things that were not an issue in the past.

The high executive salaries showed the big banks had still not realised the world had changed since the global financial crisis, Casidy said.

"Their profits are becoming excessive again and rewards for senior executives are becoming ridiculous again, and lending practices are becoming looser - all factors that contributed to the massive financial crisis globally, which the banks did not pay the cost of," he said.

What bank bosses are paid:

Westpac NZ CEO Peter Clare: A$2.97 million (NZ$3.8m) (2012)

Former Westpac NZ boss: George Frazis: NZ$5.4m (2011)

ANZ New Zealand CEO David Hisco: A$2.2m (2011) *

BNZ CEO Andrew Thorburn: A$1.87 million (2011)*

Westpac Australian CEO Gail Kelly: A$9.6m (2012)

Former CBA chief executive Ralph Norris: A$9.61 million (2011 for the last five months) & A$16m (2010)

New CBA chief executive Ian Narev: $5.68m (2012 for 7 months)

*most recent available