In a spectacular development, both CEO Andrew Thorburn and chairman Ken Henry will step down from their roles at NAB after the two were subject to a searing rebuke by Royal Commissioner Kenneth Hayne.
Despite grilling all the major banks and a host of other financial institutions, Thorburn and Henry were only ones singled out in Hayne’s final report totalling over 1000 pages, with this announcement making them the first two scalps it has claimed.
Philip Chronican, a non-executive director of NAB and former ANZ executive, has been appointed interim CEO, while Ken Henry is expected to stay on until a new CEO is recruited.
“Having heard from both the CEO, Mr Thorburn, and the chair, Dr Henry, I am not as confident as I would wish to be that the lessons of the past have been learned,” Hayne wrote in the final report.
“I thought it telling that Dr Henry seemed unwilling to accept any criticism of how the board had dealt with some issues,” he observed.
“I thought it telling that Mr Thorburn treated all issues of fees for no service as nothing more than carelessness combined with system deficiencies when the total amount to be repaid by NAB and NULIS on this account is likely to be more than $100 million,” Hayne noted.
“ I thought it telling that in the very week that NAB’s CEO and chair were to give evidence before the commission, one of its staff should be emailing bankers urging them to sell at least five mortgages each before Christmas.”
“Overall, my fear – that there may be a wide gap between the public face NAB seeks to show and what it does in practice – remains.”
That censure was enough to force Andrew Thorburn to cancel his long-leave on Tuesday and rush back to work, fronting Your Money presenter Ticky Fullerton.
“When you read the references to myself and Ken Henry, I found that upsetting, hard to read, and I did feel that was harsh. I respect that that was the Commissioner’s view… [but] I don’t share it,” Thorburn told Fullerton.
That interview – the first of several Thorburn did within hours of returning to work – appear to have been part of his unsuccessful damage control campaign.
Above: Andrew Thorburn speaks to TICKY on Tuesday
While fending off leadership speculation, Thorburn clearly appeared under intense pressure as he heads up a bank facing $400 million in remediation costs for charging customers fees-for-no-service.
Aside from Hayne’s critique, he has faced scrutiny over his decision to take leave at such a significant time for the bank at the same time that his former executive assistant Rosemary Rogers is under investigation over a $113 million travel scandal.
Henry, meanwhile, was heavily criticised for his testimony during the public hearings, appearing arrogant answering Rowena Orr’s questions and telling the Cambridge-educated QC that he “probably couldn’t explain” one point of contention to her.
Both have now fallen on their own swords, but Thorburn can at least enjoy his lucrative ‘golden parachute’.
NAB will be required to pay Thorburn out $1.045 million for terminating his contract with less than six-months notice, according to Margin Call.
That’s on top of 273,600 NAB shares Thorburn already owns worth nearly $7 million, and rights to 883,451 more, that if allowed to vest could be worth an additional $22 million.
Listen to the post-announcement press conference call with Andrew Thorburn and Ken Henry in the video above.
Watch Will Glasgow, The Australian‘s Margin Call columnist, preview the changes and the leadership recruitment process in the video below: