APRA was critical for the system & # 39; remuneration & # 39; NAB.
APRA "B & # 39; In general, there is significant scope for NAB to b & # 39; most effective way to compare risk in & # 39; of & # 39; remuneration arrangements, to manage culture & # 39; more risk b & # 39; robust and clearer responsibilities and expectations in the bank.
"The expectations & # 39; APRA on & # 39; remuneration are set out in the CPS 510. This standard states that based components of remuneration performance arrangements should be designed to align remuneration with prudent -teħid of & # 39; risk. to achieve this, the metrics of financial performance should be adjusted to & # 39; adequately risk, the risk management must have sufficient weight in skorecards, and the risk management expectations should be clear and measurable.
"In view of & # 39; APRA, The current approach of NAB still does not meet this standard b & # 39; adequately and reduce each other in & # 39; some aspects.
"Effective arrangements & # 39; remuneration should include risk adjustments. For senior executives of NAB, performance is measured primarily by & # 39; reference to earnings in cash, return on equity and net score promoter, b & # 39; supplement to & # 39; governance criteria. Plans of & # 39; long-term incentive & # 39; one based on relative total shareholder profits. Therefore, there is a strong emphasis on the measures & # 39; & # 39 in profitability, individual performance evaluations, and b & # 39; difference from their peers, no measures of profitability adjusted for risk. "
Orr: "You accept that characterization was accurate part of your remuneration in & # 39; at that time?
Henry: "Well, yes, I refer, this is what għidtilna to APRA. Yes, ovja.
Orr: "So the view & # 39; APRA, in brief, was that the arrangements & # 39; remuneration & # 39; NAB not operating properly to support the prudent risk management in -NAB? "
Henry: "That was their opinion, yes.
Orr: "And the arrangements & # 39; compliance NAB did not reach the standard you expect from an advanced APRA bank?
Henry: "This was their view. Definitely."
Orr: "All the right. Now, I & # 39; I suggest that document, the Commissioner."