Bosswatch News - Walls Come Dowm

NAB plans to cut thousands of jobs as the ANZ faces legal action for gagging a worker from talking to the press. Who said banks have an image problem?

NAB Planning Big Job Cuts

Speculating is mounting of a massive jobs cull in the National Australia Bank, with the release of the bank's 'Positioning for Growth' restructuring plan next Monday. The plan, inspired by US consultants McKinseys, will lead to between 3,500 and 5,000 job losses. There is also speculation that some branches will be closed as the bank moves to plug the shortfall caused by its $3.6 billion loss in the US with the failed HomeSide investment. The banks has engaged the Nasdaq-listed, Philadelphia outplacement agency Right Management Consultants to choreograph the mass job cuts in a bid to avoid the public heartbreak that accompanied the Ansett redundancies.

AMP Execs Feel the Pinch

A rough year on investment markets for AMP in 2001 has seen a reduction in the pay packets of the financial services group's executives by more than 20 per cent on average. The annual report shows AMP managing director Paul Batchelor received a $68,000 rise in base salary to $1.418 million in 2001, but lower bonus payments meant he took home less than in the previous year. His pay was $3.34 million for the 2001 year, down from $4.2 million in 2002. Aligning himself with the company performance, Mr Batchelor puts 50 per cent of both his long-term and short-term bonuses into AMP shares. Details of the slide in Mr Batchelor's remuneration package follows AMP reporting a 40 per cent plunge in net profit to $690 million in 2001, mainly due to the slump on global stock markets.

ANZ In Freedom of Speech Test

The ANZ is facing landmark legal action under the Workplace Relations Act for gagging a branch manager, who is also the honary president of her trade union. ANZ Padstow branch manager Joyce Buckland, who is also honorary president of the Finance Sector Union, attended a stopwork meeting last August in her capacity as union delegate and spoke to the media. ANZ views this as a sackable offence, as stated on its intranet site. The union has accused ANZ of breaching the Workplace Relations Act by threatening Ms Buckland with dismissal for carrying out union duties and of infringing her right to free speech. In the Federal Court executives have justified gagging employees and managers from speaking to the media to prevent the leaking of market sensitive information, the Federal Court was told last week.

Enron Asks To Pay Retention Bonuses

Fearful of losing senior managers and having trouble recruiting new ones, Enron Corp has asked a bankruptcy court to approve payment of lucrative retention bonuses, severances and the legal expenses of current executives and board members. The company said the spending is "critical" to its plan to rebuild. Each component requires bankruptcy court approval. Part of the plan would allow the company to pay up to $US90 million ($A171.14 million) in bonuses to hundreds of senior managers working on asset sales. The payments would be funded with a small portion of the cash they collect from those sales. Additional retention bonuses of up to $US40 million ($A76.06 million) would be paid to other senior managers involved in day-to-day operations.

Corporate Takeovers a Dismal Failure

The conventional wisdom that a merger or acquisition instantly leads to greater shareholder returns has been called into questionA study by KPMG of 73 Australian companies involved in sizeable transactions between September 1999 and September 2000 has found that just one in four created value, while 59 per cent destroyed value and 16 per cent made no difference. The report found that transactions between Australian companies proved much more damaging for shareholders in that first year than deals made in the United Kingdom and the US.