BOQ Appoints Stuart Grimshaw as CEO
The Chairman of Bank of Queensland, Neil Summerson, announced today that the Board has appointed Stuart Grimshaw to be BOQ’s next Managing Director and Chief Executive Officer.
Mr Grimshaw will join BOQ on 1 November 2011, succeeding David Liddy, who has been the Bank’s MD & CEO since April 2001.
Mr Summerson said Mr Grimshaw brings to BOQ an extensive record of achievement in financial services in Australia.
"The Board is delighted to welcome Stuart to BOQ. He has demonstrated outstanding skills and capability in financial services, having held executive positions at two of our country’s largest banks, Commonwealth Bank and National Australia Bank, as well as a Non-Executive Director role at our regional peer, Suncorp,” said Mr Summerson.
“He has worked across all facets of the finance industry, including most recently as CEO of Caledonia Investments, which manages approximately $2 billion for more than 400 investors.
“With his diverse background and impressive track record, the Board is confident he has the skills and experience we need.”
Commenting on his appointment, Mr Grimshaw said, "I am thrilled and honoured to have been appointed MD and CEO of BOQ.
“I was drawn to its challenger brand and believe it is a company with exciting prospects.
“I have followed BOQ’s growth story and it is well positioned to become a genuine competitor in the Australian financial services landscape.
“I look forward to joining the Bank in November and helping take BOQ to the next stage in its growth trajectory.”
Mr Summerson also paid tribute to David Liddy’s contribution to BOQ.
"The Board would like to thank Mr Liddy for more than ten years of exceptional leadership.
“His tenure at BOQ will be remembered for the quantum leap he achieved in terms of the growth of the Bank, not just internally through the introduction of the Owner-Managed Branch model, but also through the successful integration of six strategic acquisitions and growth in size and profitability of BOQ over the past 10 years.
“Mr Liddy has also effected a massive cultural change at BOQ, transforming a small regional bank in to a true challenger brand, with a culture of innovation, integrity, passion, teamwork and achievement. He has created an organisation with a reputation for delivering for shareholders, with a vastly improved cost-to-income ratio and an unwavering focus on constant improvement. And he has been a true leader in every sense of the word, which was particularly crucial during the Global Financial Crisis.
“The Board would like to wish him all the best for the future.”
Mr Liddy said: “I have enjoyed my 10 years at BOQ immensely, and am exceptionally proud of the team we have here and what we have achieved. I look forward to following BOQ’s progress, as I enter the next stage of my career.”
Mr Liddy will be finishing at the Bank at the end of BOQ’s financial year, Wednesday, 31 August. The Bank’s Chief Operating Officer, Ram Kangatharan, will take on the role of Acting CEO from 1 September to 1 November 2011.
The appointment of Stuart Grimshaw follows an extensive search conducted by the Board in both Australia and overseas. A biography is attached, as are the key terms of Mr Grimshaw’s employment agreement.
Biographical Details: Stuart Grimshaw
Stuart Grimshaw has held a wide variety of roles across many functions of banking and finance in a career spanning almost 30 years in Australian financial services, most recently as a Non-Executive Director of Suncorp-Metway Ltd, and Chief Executive Officer of Caledonia Investments Pty Ltd.
Stuart joined Caledonia in 2009 to assist in the growth and development of the Group through a challenging external environment. Caledonia currently manages approximately A$2 billion for more than 400 investors.
Prior to joining Caledonia, Stuart spent seven years leading a variety of functions at Commonwealth Bank of Australia (CBA). Initially joining the Bank as Chief Financial Officer in 2001, Stuart was appointed Group Executive, Investment and Insurance Services in 2002. Over the next four years, he led the integration of Colonial First State in to CBA and the consolidation of the IIS division which was renamed Wealth Management. His next move was to Premium Business Services in 2006 where he drove a change in the capability and culture of this division as well as re-energising the focus on, and growth of, CBA’s business banking segment.
Prior to joining CBA, Stuart spent a decade with National Australia Bank Limited (NAB), during which time he worked across a range of business areas including Credit, Corporate Banking, Corporate Financial Services and Global Business Financial Services. His final appointment at NAB was as Chief Executive Officer – Great Britain. In this role, Stuart was responsible for managing the performance of the Yorkshire and Clydesdale Banks which involved dealing with regulators, the Board of Directors and a staff of 7,500 people.
Stuart commenced his career at Australia and New Zealand Banking Group (ANZ) in 1983.
Stuart is President of Hockey Australia and Director of Melbourne Football Club.
Born in New Zealand, Stuart was a talented hockey player and represented New Zealand in the Olympic Games. As President of Hockey Australia, he remains passionate about this sport.
Summary of Terms and Conditions of the Employment Agreement between Bank of Queensland and Stuart Grimshaw.
The key terms and conditions of the Employment Agreement are summarised below. They have been formulated in line with the ASX Corporate Governance Guidelines and with regard to external advice on Australian and international benchmarks.
The remuneration package is made up of three key components: Fixed Remuneration, Short Term Incentive and Long Term Incentive.
The package has been designed to promote alignment of reward with shareholders' interests and provide an appropriate focus on both the short term and long term performance of Bank of Queensland.
The appointment to the position of Managing Director and Chief Executive Officer will be ongoing with reviews of performance and remuneration annually.
The position will have a base annual remuneration of $1.25 million, including the minimum statutory contribution to superannuation (Total Remuneration – TR). This remuneration will be reviewed by the Board annually.
Short Term Incentive (STI)
The STI will provide a reward for annual performance. This scheme has a range of 0 - 160% of TR and will be based on the executive's achievement of performance objectives set annually by the Board.
To ensure appropriate focus on shareholders' interests and appropriate risk management, consideration of an STI award will be subject to performance gateways. These thresholds are currently a NPAT target and risk objectives set by the Board.
BOQ is committed to ensuring that short term rewards do not encourage short term focus at the expense of an appropriate longer term organisational performance. To reflect this, 50% of an STI award will be paid as Deferred Award Rights (DARs). These award rights will vest over two years (50% each year) and will provide incentive to ensure short term performance leads to sustainable performance for the Bank.
The deferral will also provide meaningful financial encouragement for the executive to continue in his role. If the executive resigns before the vesting dates, the DARs will lapse.
Long Term Incentive
To further reinforce the importance of an appropriate focus on the long term performance of BOQ, a long term incentive will be provided.
This involves the granting of Performance Award Rights (PARs) which vest after three years. These award rights are subject to a vesting condition based on a comparison of BOQ's TSR (Total Shareholder Return) over three years against a Comparator Group. If BOQ's TSR is better than 50% of the Competitor Group then half of the allocated PARs will vest. This vesting percentage will increase on a straight line basis until the performance of BOQ's TSR is above the 75th percentile. At this point 100% of the PARs will vest.
To ensure that this long term focus remains beyond the employment of the executive, if the executive leaves for a reason other than summary dismissal, the vesting of PARs will not be accelerated and they will vest in accordance with their terms if the vesting condition is satisfied over the three year period.
The executive will receive an initial allocation of PARs based on an allocation of $1 million and the volume weighted average price of shares after announcement of the FY11 financial results.
Termination may be instigated by either party on 6 months notice.
On a fundamental change, the executive can terminate and receive payment of 12 months TR plus partial STI if awarded by the Board.
There is no accelerated vesting of DARs and PARs. For termination by BOQ or for a fundamental change, the DARs and PARs continue after termination and vesting is subject to their terms.
Fundamental Change is: removal of the executive as a director by shareholders, the executive being required to report to someone other than the Board, the executive not being the most senior executive in BOQ or in a new holding entity or the executive's positions are redundant.
The executive is subject to a restraint for a 6 month period after ceasing employment with BOQ. This restraint covers being employed or engaged by a financial services institution which is in direct competition with BOQ. The executive also warrants that he will not solicit away from BOQ any BOQ employees, customers or clients with whom the MD has had direct contact in the previous twelve months.
Grants of award rights are subject to the approval of shareholders which will be sought at the 2011 Annual General Meeting. If approval is not given, BOQ will either satisfy the entitlements by arranging for the acquisition of shares on market when DARs or PARs would have been exercised, or in cash.