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National Australia Bank has announced that its outgoing CEO Andrew Thorburn will receive a $1.04 million payout in lieu of 26 weeks’ notice, plus accumulated leave entitlements.
The major bank’s disclosure to the Australian Securities Exchange states that Mr Thorburn's unvested deferred awards will be "forfeited in accordance with plan rules", meaning he will lose more than $20 million in unvested payouts.
NAB’s board of directors has established “two special committees” that will manage the selection of a new group CEO and chairman. Ann Sherry will chair the CEO selection committee, while David Armstrong will oversee the chairman selection.
Mr Thorburn announced he would step down from his role as CEO, effective 28 February, along with the major bank’s chairman, Ken Henry, also stepping down once his replacement is found.
The board has asked Philip Chronican, NAB’s current non-executive director to serve as acting CEO from 1 March, subject to relevant regulatory approvals, until a permanent replacement is decided.
The incoming acting CEO will receive a fixed monthly fee of $150,000 for the period he serves as CEO, including superannuation. This reportedly represents an annualised remuneration of $1.8 million, compared to the $4.3 million Thorburn took home in the 12 months to the end of September 2018.
Mr Chronicon will not receive variable remuneration or non-executive director fees while assuming the role of interim CEO.
Outgoing chairman Mr Henry had recently accepted Commissioner Kenneth Hayne’s position that the major bank has a “mountain to climb” before closing the “big gap”.
“The gap that I see is that NAB does aspire to do the right thing by every customer, every time, and everywhere, and we’re a long way from that,” he said.