Reduced satisfaction hurdle preserved for new CBA CEO
The hurdles for the payment of the long-term bonus to the incoming chief executive of Commonwealth Bank will relate mostly to "total shareholder return" with only a small component relating to measures of customer satisfaction.The notice of meeting for the CBA annual meeting shows that Ian Narev will qualify for CBA shares worth $2.5 million a year, equivalent to the value of his base salary.Three quarters of the bonus will be tied to CBA's ranking on total shareholder return relative to its three peers, ANZ, National and Westpac. The TSR component will be payable in full if the CBA TSR ranks above the other three banks, and lesser amounts for lesser rankings.One quarter of the bonus will be tied to measures of customer satisfaction compiled by Roy Morgan Research, DBM Consultants and Wealth Insights.This split follows for the formula used in recent years for the bonus for the outgoing CEO, Ralph Norris. In the early years of Norris' tenure the bonus was tied wholly to measures of customer satisfaction (while still subject to a profit gateway).