AusSuper CIO paid $947k bonus

AustralianSuper’s executive team were paid a total of $6,091,406 including bonuses totalling $2.54 million between four of its executives during the 2019/20 financial year.

The industry superannuation fund was asked a question on notice by the House of Representative Standing Committee on Economics on what its base salary and bonuses were for the 2019/20 and 2020/21 financial year.

AustralianSuper pointed to its annual report in answering the question but noted that its 2020/21 FY salaries would be reported in its 2020/21 annual report.

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The annual report said the fund’s chief investment officer and deputy chief executive, Mark Delaney, had the highest remuneration of the executives including a base salary of $733,437 and a performance payment of $947,400. Together with his superannuation payment, this gave him a total remuneration of $1,705,837 for the 2019/20 financial year.

The next best paid at the fund was its former head of equities, Innes McKeand, who had a total remuneration of $1,159,635 including a performance payment of $577,635. McKeand left the fund in March 2021.

The fund’s outgoing chief executive, Ian Silk, received a total remuneration of $1,111,234 and while he did not have a performance payment, he received non-monetary benefits totalling $17,417.

The fund’s head of mid-risk portfolios, Jason Peasley, had a total remuneration of $1,076,700 including a performance payment of $494,700.

AustralianSuper’s head of asset allocation and research, Carl Astorri, had a total remuneration of $1,038,000 including a performance payment of $519,000.

During the year, the fund had over $182 billion in assets under management.

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And how is this fair and reasonable???
50% of their remuneration is bonuses and incentives??? A Financial Adviser is banned from receiving bonuses or incentives, we get taken out to lunch by a fund manager and we have to declare the $30 as a benefit......these guys are getting $500,000 + as bonuses and this seems all ok with ASIC?????
This Industry is just a joke now.

Very valid point MB

Lucky the industry funds only provide benefits for members and no fat cat bonuses to dodgy financial adviser types, or tickets to the corporate box at sporting events like those dirty financial services types. In another article the industry funds are talking about benefits for members only not dodgy financial groups. Seems the biggest dodgy financial group is industry fund executives.

If any of them holds an AR perhaps we can report them to a code monitoring body using Standard 12

Give it time, they will become like the big banks and get in trouble with issues like paying themselves big bonuses, staff misconduct cover ups, conflicts of interest and bribes, and fee for no service.....oh wait a minute, they are already there! Where is Adele Ferguson and her expose?

Adele is busy on more interesting projects at the moment. She is also looking at her AustralianSuper account online and is very happy with the returns. She might write a good news story about it.

She can't believe how her 'Balanced' fund is performing so well - oh wait, or is that a 'Growth' fund???

That's just it. Members want good performance over a long period. They worry about the performance numbers and the $$$$$$ their account increased by. They don't give a hoot about asset allocation when AustralianSuper great investment performance keeps-on-keeping-on.

Yes and what are the details of the performance related bonus? If it's for just investment outperformance of, what index? But isn't this a conflict, i.e, it just encourages higher risk taking, Does the bonus like a performance fee have a high water mark, i.e. when bad years come they have to make those up. Otherwise just take more risk than the benchmark, sit and wait for bull years, cream the bonuses, and in bad years pocket 'just' the measly salary.

I have no doubt they would benchmark their 'balanced' fund against a balanced AA index, completely disregarding their 'balanced' fund is actually invested high growth and underperforming the appropriate risk adjusted index.

But hey, compare the pair.

Meanwhile in the morning ASIC team meeting....."Don't worry about whats happening over at Australian Super, they manage our corporate super so if we look after them, they look after us" ......."Now how are we going with prosecuting that sole practitioner that is battling cancer and was a month late providing a review to a client?" !!

Comments here a bit infantile.

The CIO is in a very different position to an adviser re clients. Looking at the investment performance - it appears as if he and the team have delivered for their members.

Relative to old Hamish and others the guy is probably underpaid - but then he is not an entrepreneur - he took no risk.

I have no issue with reward for delivery.

So should advisers be able to charge a fee/s based on an outperformance against a benchmark?

Why not? Speak with your clients about it and gauge their feedback.

Because I'd have a conflict in the benchmark I set for myself. And a conflict in how I choose to calculate return. How cash flows in and out effect return and how I choose to treat them. etc etc

So basically you don't have the competence to do it so you won't need to raise it with your clients. Their feedback would have been interesting.

I think what he is eluding too is a bit above your pay scale.

He’s suggesting you can outperform a benchmark easily when you choose what benchmark suits you. It’s also a lot easier when you invest in illiquid assets where you control the valuation timing and the discount rate applied.

Listed assets of the same kind down 40%?? No worries, don’t mark to market as that would affect performance.

I think what he was eluding to was well above both his and your ability combined, which makes why he raised it, and you responding, a concern. A concern neither of you should have been involved in.

So we go to mr and mrs jones and ask to be put on performance bonuses which by the way are not even allowed under the coe or law. Do some research, we dont live off returns from unlisted assets and gravy train sg inflows. We actually need to justify our fees with direct services recieved as well as being judged on returns we achieve for our clients. Which in the main are better than the default options offered by many large funds, how else do we get people to switch for example if required and stay with us. If you are licenced you are policed very heavily especially in terms of how and what fees you charge, everyone knows that. Performance fees , absolute piffle tell that to the compliance department see what they say. These fat cat bonuses just show there is no difference between non and for profit funds, for members only what a crock of crap that is.

Then if you can't do it (which is debatable) why did he raise it and you respond? If the clients are signing on each year re adviser fees, why not increase the fees the following year based on the outperformance the previous year? Think outside the square everyone. If a client sees the benefit of your fund manager selection and expertise, wouldn't they be keen as mustard to sign up again? I keep getting told how much your clients love you all and you educate them. This is the time to prove it. If they don't accept your higher fees based on your brilliance and outperformance the previous year, they obviously don't appreciate you. If that's the case, move them on. No advice for you!

You are now conflating the argument. Increasing your fees each year relative to portfolio size is common, and rewards investments heading in the right direction.

That’s completely different to a performance fee. Such fees are strictly forbidden by the FASEA code due to the conflicts (perceived or real) they result in. Skim more off the top in fees in a good year, great, conflicted to take extra risk with clients investments…. Oops you’re banned from the industry as you placed this ‘balanced’ client in a ‘high growth’ asset allocation (perhaps Aus super balanced) even if they were better off.

"I have no issue with reward for delivery". Great, lets have FUM based fees and bonuses for Financial Planners then.

Good on them. Great success should equal a great reward, and its published. Well done gents.
As noted earlier, there is a big difference in the role of a CIO of one of the worlds largest pension schemes and a suburban financial planner.
On a global basis, I think he is providing a brilliant result for a very modest price.

Oh dear. A true believer. Regulator?

Sounds like you might be a little jealous of successful people being rewarded as they should.

I remember the good old days 20 years back when you had the top six senior executives at the "Millionaire Factory" all on $25 mill a year, each.
Nice work if you can get it?
Don't think they had $182 billion under management!

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