Commonwealth Bank will dump bonus caps agreed in the shadow of the Hayne royal commission as it opens a new front in the mortgage war in a bid to stem market share losses to rival Macquarie.can reveal CBA will seek to stop its best-performing home loan lenders leaving by lifting the maximum bonus it can pay those bankers from 50 per cent of base pay – the limit imposed by a Stephen Sedgwick-led review for the Australian Banking Association in 2017 – to 80 per cent of base pay.
“There will be some changes to how we remunerate our best lenders, to pay them a bit more. We want to make sure our very best people are rewarded more than they are today, to stay with CBA. We can’t have a cohort of our best lenders consistently leaving.” He said that internally, the Bankwest strategy is not viewed as a direct response to Macquarie but more of a recognition that borrowers will continue to favour brokers and digital-only experiences so CBA needs to be more aggressive in that part of the market.The move to breach Sedgwick caps has raised the eyebrows of regulators and remuneration experts.
CBA said it would continue to assess all bonuses using the “balanced scorecard”, which requires bankers to meet “soft metrics” including on customer satisfaction and risk. But volume-based sales outcomes will end up as a higher share of the total scorecard. “But it is one of those problems never going to be completely solved, and the further away you get , the more likely you see slippage and the voice of risk and compliance becomes less important within the organisation.”
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