Commonwealth Bank chief to retire this year

Australia’s highest paid banking executive Ralph Norris will retire from the Commonwealth Bank in November, after six years as its managing director and chief executive officer.

In a statement to the stock exchange this morning (pdf), the bank announced that former McKinsey & Co consultant Ian Narev would take the helm from December 1.

Narev joined the bank in May 2007 as group head of strategy, where he led the acquisition of Bankwest and investment in Aussie Home Loans.

He was promoted to group executive of business and private banking in January 2009. Prior to joining the bank, Narev was a global partner at McKinsey & Co in New Zealand.

The Commonwealth Bank today announced that Narev would receive a total fixed remuneration of $2.5 million, which would be reviewed annually.

He would also receive annual bonus payments for meeting short-term incentive targets – initially set at $2.5 million – as well as an additional $2.5 million in long-term incentives, subject to shareholder approval.

Outgoing executive Norris, a former chief information officer, made headlines last year for receiving an income of $16.2 million in the 2009-10 financial year.

Bank chairman David Turner today credited Norris for having “led the group through the global financial crisis while remaining focused on the transformational change program”.

The “transformational change” was supported by a $1.1 billion core banking overhaul that commenced in April 2008 and was announced to have passed the "halfway point” this March.

Narev said today that being asked to lead the bank was “a great honour”.

“I’m really looking forward to taking over Australia’s leading bank at a time of rapid change in the local and global economies, continuing the focus on transforming the group to become Australia’s finest financial services organisation and continuing to move that aspiration selectively into Asia,” he said.