BNZ boss looks forward to challenge
RICHARD MEADOWS AND AUSTRALIAN FINANCIAL REVIEW
Bank of New Zealand boss Andrew Thorburn says he is more interested in the challenge of his new role in the top job at parent company National Australia Bank than the A$6 million (NZ$6.48m) pay packet that comes with it.
Thorburn follows in the footsteps of his BNZ predecessor Cameron Clyne, who will step down from NAB in August to spend more time with his family.
Thorburn, 48, said he was both scared and excited about the step up.
"I have no illusion that it's going to be tough, difficult in some ways, but I feel that's a challenge I want."
The Melbourne-born career banker insisted he was a New Zealander, having working here for 19 years, including more than five as BNZ chief executive.
His first job will be to appoint his own successor, which he said he was confident of achieving.
"We have some very good talent. That process won't take long, but it'll be done properly."
Both the new and outgoing NAB bosses have come from the BNZ, and Thorburn said New Zealand was fertile ground for development.
The Australian-owned banks here were independent and full-service, he said, and also subject to intense competition:
"There are 23 banks, and 4.5 million people. You have to be sharp. You can't be slow, and lazy, and fat," he said.
"For both those reasons, New Zealand's a very good development ground, not just for banking but for other industries as well."
As Thorburn's responsibilities shift from handling 5,500 BNZ staff to the 42,000-strong NAB team, he will be compensated with a handsome pay rise.
Information filed with the ASX suggests he is set to double the A$2.59m he earned in the 2013 financial year.
Thorburn's new base salary will be A$2.2m, with short-term incentives worth up to an additional A$3.85m if he exceeds set targets. Long-term incentives will add A$2.86m, subject to shareholder approval at NAB's annual meeting in December.
Those rights are vested over four years and subject to performance against total shareholder returns.
Combined, the pay package could top A$6m in any given year.
However, Thorburn said he had taken the board's initial offer, and money was not his primary motivation.
"For me, if you end up having to do it for the money that's a very sad day, if that's the driver of it," he said.
While Thorburn said he was sad to leave behind "a brilliant bunch of people" at BNZ, the flexibility of the job meant he would be back for regular visits.
Meanwhile, Clyne said the NAB leadership had taken a personal toll, and it was time to retire from executive life to spend more time with his young family.
He joked that one of the critical goals he had set was for his marriage to last longer than his tenure as chief executive.
"I think you just have to make a choice," he said.
"A lot of people talk about work-life balance, and this is what it looks like when you prioritise family over the career."
Clyne said he did not have any directorships in mind and promised not to take up a competitive role against NAB.
A dual Australian-New Zealand citizen (his mother is a Kiwi), Thorburn and Clyne are close friends.
Thorburn, who is a committed Christian, has been married to his wife, Kathryn, for 27 years, and has three children, aged 18, 21 and 23, at university. Born in Melbourne, he is a mad supporter of Essendon in the AFL. But when watching rugby union, he barracks for the All Blacks.
Thorburn, who also plays the drums, has been a banker for 27 years.
He began his managerial career as a regional head of ASB Bank, owned by Commonwealth Bank of Australia, in Auckland in 1986, where he worked under Ralph Norris, who was running ASB at the time.
During his tenure in New Zealand with BNZ, Thorburn has largely focused on keeping costs under control.
NAB chairman Michael Chaney pointed to Thorburn's "superb job" building BNZ's cash earnings by more than 40 per cent and "developing a strong leadership culture". But one analyst, who asked not to be identified, said Thorburn's performance in New Zealand had been underwhelming, pointing to reduced margins in the business as it was forced to chase deposits to maintain its funding ratios.
During this time, he oversaw a lengthy tax dispute with New Zealand tax authorities along with the other big four banks over a series of highly profitable ''repo'' deals. It led to a combined settlement of $1.7 billion.
The case exposed NAB to heavy write-downs at a time when it was battling rising bad debts and slowing credit growth following the global financial crisis.
Thorburn has also been responsible for NAB's Asian and United States operations. Outside the bank, he has played a leading role in the Trans-Tasman Business Circle.
A banking insider noted Thorburn was viewed as a "safe pair of hands" and the best among the existing bench to take the top job. He is described as a people person and has less of a "mechanical style" than Clyne.
A former colleague said Thorburn introduced uniforms into NAB's branch network and also instituted a new system of employee rewards and incentives.
- Fairfax Media