Commonwealth Bank chief executive Matt Comyn has had to compare his $3.9 million base salary with a teller’s $60,000 paypacket as questions became personal during a federal parliamentary inquiry.
Mr Comyn gave the figures in answer to questions from Labor senator Andrew Leigh, who then told the bank boss his pay was actually more than $5 million including long term incentives.
“Are you comfortable with the gap,” Senator Leigh asked as part of the economics committee inquiry, held via videoconference.
Mr Comyn replied: “I recognise executive remuneration in banks and across all industries is contentious.”
“I understand how it’s a question on people’s minds,” Mr Comyn said.
Mr Comyn said the pay gap had increased at an accelerated rate in many countries compared to Australia.
“There should always be questions about remuneration and clear disclosure of what is earned, not just for me but for all the executive team.”
Changes to how bank executives’ pay is calculated was one of the recommendations of the banking royal commission.
Commissioner Kenneth Hayne published his final report last year, which included calls to limit financial metrics such as profit when calculating executive pay.
The CBA boss said his performance measures included non-financial elements such as risk, values and strategy.
Mr Comyn also told the inquiry increased regulation of banks since the royal commission, aimed to ensure responsible lending, had made it harder for people to get a loan.
He said the bank was spending tens of millions of dollars on computer systems to assess loan applications and provide decisions in a couple of days.
“Banks are far less able to rely on what customers were telling you in loan applications,” he said.
“In my view there’s an abundant supply of credit for housing, but it’s harder for customers to get a loan.”
The inquiry is expected to shed light on the consequences of mortgage and small and medium business loan deferrals during the COVID-19 pandemic, and the potential for reform of “responsible lending” laws.
Treasurer Josh Frydenberg told parliament this week the flow of credit would be critical to Australia recovering from the recession.
The economy shrank seven per cent in the June quarter because of the coronavirus, confirming the nation is in the first recession in three decades.
Earlier, ANZ’s chief told how he expected banks to feel the worst of the pandemic in the middle of next year.
Shayne Elliott believes the economy will be at its low point between now and the end of 2020, which will flow on to the banking sector.
He expects people to then find their businesses unable to operate.
“We think that’s probably more like the middle of next year, when the crisis will start to hit the banks,” Mr Elliott told the Senate inquiry.
ANZ expects gross domestic product to recover in 2022.
Mr Elliott said Australians were continuing to pay credit card debts, while about 84,000 customers have deferred home loans.
Committee chair Tim Wilson said banks needed to be held to account over the extent of their support for consumers during the pandemic.