Macquarie Commodity Trader’s $39 Million Pay Tops Dimon

(Bloomberg) -- Nick O'Kane, whose powerhouse commodities trading business underpinned Macquarie Group Ltd.'s record annual profit, is taking home more than the firm's CEO.

O'Kane, who took over as the head of the commodities and global markets unit in 2019, is getting a 59% boost to A$57.6 million ($38.6 million) for the year through March 2023, according to Macquarie's annual report released Friday. In contrast, Chief Executive Officer Shemara Wikramanayake is getting a total of A$32.8 million, up 27% from a year earlier.

Ructions in commodities markets drove a 54% surge in profit from O'Kane's unit to A$6 billion as hedging and trading activity rose. Macquarie said North American gas and power was a particular area of volatility.

O'Kane's pay also topped that of the biggest US bank bosses. Citigroup Inc. awarded Chief Executive Officer Jane Fraser $24.5 million for 2022, while JPMorgan Chase & Co. kept Jamie Dimon's total compensation at $34.5 million for that year.

The Sydney-based bank entered the US natural gas market in 2005 with the acquisition of Cook Inlet Energy Supply, and in 2009 acquired Constellation Energy's downstream natural gas trading platform. “Then O'Kane built a matrix of leases over gas and energy transmission networks, making Macquarie the most powerful player in the US market,” according to , a history of Macquarie by Chris Wright and Joyce Moullakis, released this year.

The purchase of the Constellation business during the financial crisis represented “a really significant step change in our energy business and really helped us grow into the business that you see today,” O'Kane said in a video on Macquarie's website.

Fixing Imbalances 

Macquarie helps clients manage volatility in commodity prices by providing hedging products and lends working capital to metals, energy and agriculture companies.

It also takes opportunities to trade commodities “where there is an imbalance between the supply and demand for commodities” and provides storage and transportation, the firm said in a separate report Friday. This inventory management and trading operation was the best performer within the commodities and global markets unit, boosting income by almost two and a half times to A$2.7 billion for the year, it said.

The lender's commodities business, which generated more than half of the group's profit, is unusual among banks in the U.S., where counterparts such as Goldman Sachs Group Inc. and Morgan Stanley have had to curb commodities trading activities to satisfy regulators.

‘Exceptional Year'

Macquarie chairman Glenn Stevens defended O'Kane's outsize salary, noting the bank is competing for talent in a global marketplace. 

“It's worth emphasizing that he's put that collection of businesses together over 25 years, assembled an incredibly capable team of people, and the model here is that the people that generate the return, share with shareholders in that return,” Stevens said on a conference call Friday. “This is an exceptional year so it's not a surprise that there are some exceptional numbers,” he said.

O'Kane described Macquarie as an organization that has a bias toward saying “yes,” in the video on the bank's website.

“If you have a great idea, you will get the opportunity to be able to chase that idea down and build a business and you never know what that might come into,” O'Kane said. 

(Adds chairman comments from 10th paragraph)

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