ASX to pay bonus to outgoing chief despite shareholder opposition

The board of the Australian Securities Exchange (ASX) has awarded its outgoing chief executive a bonus of over £700,000 despite opposition from shareholders angry at a late-running back office project.

More than 30% of shareholders voted in Wednesday's AGM against the senior management compensation packages proposed for last year, which included A$1.2 million (£720,864) for former chief executive Dominic Stevens. That was 60% of the possible A$2 million that could be awarded, with the shortfall attributable to the ongoing issues with implementation of the CHESS upgrade.

Speaking at the firm’s AGM on Wednesday, chairman Damian Roche acknowledged this represents the exchange’s first ever “strike” in response to a shareholder question. Under Australian company law, two consecutive strikes (representing a higher 25% rejection of remuneration plans) would trigger a re-election of the board.

“The CHESS project is highly complex and remains challenging,” Roche said at the meeting. “There is no question that the performance of this project did not meet our or our customers’ expectations in 2022. We share the frustration of our stakeholders.  Hence ASX’s commissioning of an independent expert review into aspects of the project by Accenture.”

The exchange in August delayed again its CHESS replacement programme to upgrade the ASX's back-office systems with distributed ledger technology, which will now not go live before late 2024, commission a further independent review by Accenture on the application of the technology.

Independent auditors and the monitoring group overseeing the project had warned of further delays amid issues with software upgrades and delivery milestones. The Sydney-based exchange group in March hired David Curran, a former chief information officer at Westpac Group, to help manage the project.

“Reflecting this, and as disclosed in the Annual Report, the Board used its discretion to materially reduce the former CEO’s variable reward by 40%,” Roche added. “Other senior executives accountable for the project also had their rewards reduced by between 10 and 20%. The Board believes this outcome appropriately balances the disappointing progress of the CHESS project with ASX’s strong performance in other key areas.”

Hamish Treleaven, chief risk offer at ASX, received variable compensation of A$315,000 (representing the 10% reduction) while Timothy Hogben, group executive for securities and payments received A$600,000 (a 20% reduction of the performance pool), according to ASX’s 2022 annual report.

The Australian exchange group announced in February Stevens was leaving the firm after six years at the helm. ASX said in June that Helen Lofthouse, the group's head of derivatives since 2015, would become chief executive officer when Stevens stepped down from the role at the end of July. Stevens remains in an advisory role until the end of this month, ASX said at the time.