Vittoria Shortt says accountability, not scandal, drove her reduced remuneration this year
ASB chief executive Vittoria Shortt (pictured) has confirmed her pay was reduced this year, saying the bank's board applied consequences following a run of costly legal setbacks.
The bank reported a 4% fall in annual profit in a year that saw it settle a class action lawsuit for $135.6 million and cop the largest anti-money laundering penalty ever handed down by a New Zealand court, at $6.731 million.
Board applied consequences
Speaking to interest.co.nz, Shortt said the outcomes were not something anyone at the bank wanted, but that accountability had followed regardless.
"None of us like making mistakes," she said. "There's not one person at ASB, including myself, that wants to make a mistake. And unfortunately, some have been made. So, we put it right and there are consequences. The executive and myself have been held accountable for these things."
Figures in parent company Commonwealth Bank of Australia's annual report show Shortt's total statutory remuneration fell 7% year-on-year to A$2.93 million, down from A$3.15 million previously. She also received just 37% of her maximum potential short-term variable pay, compared with between 74% and 92% for other CBA executives.
Shortt, who has led ASB since February 2018 and has been with the CBA group since 2002, still had A$2.78 million of deferred awards vest during the year, with her pay disclosed in New Zealand dollars subject to exchange rate movements.
Asked directly about the board's role, Shortt said remuneration decisions are reviewed annually.
"Every year the board will go through, and they will make decisions and yes, that [a pay reduction] has occurred for this year," she said.
Legal setbacks behind the numbers
The class action settlement, reached without an admission of liability, related to alleged breaches of the Credit Contracts and Consumer Finance Act affecting customers with home and personal loans between June 2015 and June 2019.
Separately, ASB admitted liability for all seven causes of action in a Reserve Bank case under the Anti-Money Laundering and Countering Financing of Terrorism Act, with a judge finding the bank's standards had fallen "far below the expectations reasonably placed" on one of the country's largest lenders. Contraventions included failing to resolve more than 120,000 standard priority alerts within required timeframes, covering transactions worth roughly $11.62 billion.
Despite the setbacks, Shortt pointed to broad-based growth across the business — home lending up 6% over the year, and every major segment performing at or above overall market growth — and said most customers had weathered the disruption well.
"While it's been a challenging time for some, by and large our customers appear to have weathered the storm well, with fewer households experiencing loan difficulties," she said.
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