Share-based windfall to Macquarie bosses

Senior executives at
Macquarie Group will be sitting on a windfall of more than $100 million
as they soon begin receiving the first shares under the investment
bank's recent shake-up of bonus payments.

The overhaul for the
bank - dubbed the ''Millionaires Factory'' for the generous payments to
its bankers - will see a switch away from cash bonuses to longer-term
share-based incentives aimed at diffusing shareholder anger towards
excessive pay packets.

The move, approved by shareholders last
month, is designed to head off a potential crackdown on bankers' pay by
regulators in the wake of the global financial crisis.

Bonus payments often make up the bulk of the take-home remuneration for senior investment bankers.

When
scheme details were finalised in October, some $350 million in
Macquarie shares were acquired under the Macquarie Group Employee
Retained Equity Plan.

The bank yesterday confirmed that about 9.5
million shares would be issued under the scheme, with the average
conversion price for the majority of the awards being $36.36 a share.
This compares to yesterday's closing price of $48.41, giving the share
payments a headline value of nearly $460 million.

Macquarie's
chief executive, Nicholas Moore, also elected to move his entire
pre-2009 retained profit share - $17.2 million - into the new equity
scheme.

The deep discount in the conversion was calculated based
on the average price of Macquarie shares between last May and July.
While this coincided with a period when its shares were trading near
cyclical lows, the bank had flagged a month earlier that it intended to
open a pricing period for the staff share scheme.

The chairman,
David Clarke, last month told shareholders the switch to
performance-based shares aligned the interest of shareholders and staff.

Critically, it gave Macquarie staff the incentive to boost the share price over the medium to long term.

He
said Macquarie's remuneration approach ''encourages staff to focus on
earnings growth and return on equity … while appropriately managing
risk''.

Anger towards bankers' pay is expected to flare on a
global stage on Friday when JPMorgan Chase hands down its
fourth-quarter result, and with it a compensation pool expected to push
$US29 billion ($31 billion). Citigroup, Morgan Stanley and Goldman
Sachs will report next week.