Chanticleer
RBA's ugly message for households, inside Australia's biggest investment event & Macquarie's pay lessons
08 May 2026
Transcript generated automatically by AI and may contain errors.
Chapter 1: What is the main topic discussed in this episode?
The Australian Financial Review.
Hello, I'm James Thompson, Senior Chanticleer Columnist at the AFR. Welcome to our weekly news breakdown of all things business, finance and markets. With me today, as always, is my Chanticleer colleague. He's stronger than the Australian dollar. It's Anthony McDonald. How are you, Anthony? I wish I was at a four-year high this week, James. Oh, you're always at a four-year high.
This week, we look to unpack another rate rise and what Michelle Bullock said about the next six months. We take you inside the room at the biggest meeting of Australian companies and investors, and we preview the federal budget, which is only a few sleeps away.
But first, James, let's start with a bit of news from Friday morning. We got one of the juiciest results of the year. Macquarie Group's juicy because the numbers are normally big. Macquarie reported a $4.85 billion profit, one of its best ever, with revenue earnings up across all of its divisions, commodities, asset management, banking, investment banking.
But James, the story's always in the pay tables here, isn't it? Oh, we're so crass, aren't we, Anthony?
We go straight to the remuneration table. How much did Shamara Wickramanika get paid? Oh, it's $26.5 million. That's a fair bit, isn't it? Solid. But the story here is actually what she didn't get paid. She took a pay haircut of $7 million or 21%, Anthony. That's a fair whack.
This goes back to that story last July, where at Macquarie's annual general meeting, they got a protest vote against their remuneration report. Basically, investors thought, hang on, Macquarie, you've had too many issues with the regulators, too many sort of quasi scandals, but none of your executives have taken a big pay hit. We don't like it. Here's a strike against your pay report.
All pretty embarrassing for Macquarie, if I'm honest. And really the board has said, no, we've listened. And it looks to me, Anthony, like Shamara's jumped on the grenade. She thinks that Macquarie's pay structure, which is basically incentivize top people by paying them lots of money, is really important.
It feels to me like she's taken a big haircut on her pay to make sure that she can preserve that pay structure, which she sees is really important to the Macquarie model. Yeah. A couple of other numbers from the pay report that are worth noting. $24.1 million, that's the pay of a guy called Ben Way, who runs the Macquarie Asset Management Division.
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Chapter 2: What did the RBA's recent rate rise mean for Australian households?
Now, that almost doubled on last year's pay because MAM had a big year. It sold a number of businesses or announced the sale of a number of businesses. There was air trunk sale. The performance fees from that are starting to come through. There was a sale in October last year of a company called Aligned Data Centers in America. Some performance fees from that coming through as well.
But the big number in the pay, Anthony, get ready for this. Yeah. Simon Wright, the head of the Commodities and Global Markets Division. took home $35.2 million. Well, when I say took home, the Macquarie Styles actually defer a lot of that profit share. So he's not taking it home yet, but he's been awarded that big number, and that came from a big profit boom in the CGM division.
Profits there jumped 49% to $4.2 billion. It's a big whack. Now, the CGM division can be pretty volatile. They sold a big business, a smart meters business in the UK, so that helped the profit. And of course, when you see volatility in the world, and there's no greater source of volatility at the moment than the war in Iran...
That means you get plenty of trading activity for the commodities division and their profits go up as well.
Chapter 3: How did Macquarie Group's profit results impact investor sentiment?
So look, we've only had a month of the war in these numbers because they only go up to March 31. So you'd expect there's some more good, healthy profits to come from the war in Iran for Macquarie. What did you make of it all? It felt a little bit to me like Macquarie's got its groove back. It was a very Macquarie result, if that makes sense.
Yeah, I think it's fair to say it's got its groove back, James. Probably third highest profit ever. The first two are the ones around the Ukraine invasion when they happened, 2022, 2023. Macquarie does well in times of
these energy markets volatility that's when it makes it super profits like you i'm interested in the compensation at the bank it's about 40 across the bank so about 40 of every dollar brought in in net revenue gets paid out to staff that's about what you'd expect in the industry slightly lower than last year but i mean i think that tells you it's a fat year
I'm interested in your take on Shamara's $7 million hit. James, you reckon this is Shamara hugging the bomb, though, rather than it being lobbed at her?
Well, a little bit of both. But the reason I say she's sort of jumped on the grenade a little bit, you look at how everyone else's pay has been marked down, and you're talking about markdowns of 5% to 10%, nothing like 21%. So, I mean, I think it's right that the person at the head table takes the biggest hit. The buck stops with the CEO, as we're always told. So, that's totally fair enough.
But I think Shamara is a big believer in this Macquarie model, in that pay model, and how important it is keeping the millionaire's factory running. So, I think, yeah, she has taken a big hit, probably for the greater good of the place. I don't know. Am I being too generous?
No, I just wonder whether it was her or whether it's the REM committee, to be honest. Like, As much as CEOs love to take the blame, I wonder whether that's the case if you put your hand up for it or whether it happens to you. It probably doesn't matter either way. But yeah, you're right. 25% of her profit share allocation is gone. That's the $7 million.
The next most was 15% for Greg Ward, who runs the local banking and financial services business. It has Macquarie's platform, the wealth platform, That was the bit that got hit earlier this year with the Shield Master Fund, a fund that looks like it was full of assets that had been compiled together quite dodgily and ASIC's going after them.
Macquarie repaid financial advisors who put their money into that fund. So, I mean, that's why Greg Ward's been hit next. But you're right. After that, it's sort of like 10% here, 5% there. Shimara, though, feels the most pain. Yeah.
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Chapter 4: What insights were shared from Australia's biggest investment event?
All right, James, let's move to our first big topic of the week, and that's interest rates. On Tuesday, Reserve Bank of Australia Governor Michelle Bullock did the inevitable and raised interest rates for the third straight meeting, taking the official cash rate back to 4.35%, which matches the post-pandemic high. James, it went to script, really.
Bullock told us inflation was already too high and was headed higher as the oil price makes its way through the economy. The Monetary Policy Board voted 8-1 in favour of lifting rates, and the market's already telling us there's a 26% chance of a fourth straight rate rise when the board meets again in June. James, you tuned into the press conference. You've had a few days to stew on it since.
What do you think Michelle Bullock was really trying to tell us this week?
Sorry, this is going to hurt, and it might hurt a lot. There's no great surprise in the message. Inflation was too high before the war in Iran started, and really what Bullock said is all the price hikes from the war in Iran, they still haven't arrived. Yeah, okay, fuel's gone up, diesel's gone up, but the government's blunted that with its fuel excise cut.
So, really, we're waiting for the second and third order effects of the Iran war energy shock to come through. So, you know, the packaging around that thing you buy from the supermarket, that's going up in price, just hasn't hit yet. The food itself, that's going up in price, just hasn't hit yet, but it's coming. The problem is twofold.
One is that inflation's too high, needs to be brought back to target. But you can sense that what Bullock is really worried about is that we are moving into a world where Australians just expect prices to go up every single year. It's this idea of inflation expectations getting away from the RBA and becoming embedded in our society and our economy.
Deputy RBA Governor Andrew Houser called it the central banker's nightmare for a reason. I reckon you could see at this press conference that it is keeping Michelle Bullock up at night. They are in a really, really tough spot. There's a great grab from Michelle Bullock on the day, which sort of explains inflation expectations probably better than I can.
She always says that she has her mum's friends in mind when she explains stuff, and this was a great piece of communication. Let's hear from Bullock.
These interest rate rises are not going to do anything for inflation in the next six months. That's done and dusted. We know that those prices are coming through. Second point I would make is that it's not unreasonable for firms, if they are seeing their cost bases rise because of what's going on, whether it be fertilisers for farmers or
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Chapter 5: What are the implications of the new gas reservation policy?
Second lesson for me, James, this one's been coming for a while, but it hit home for me when I was listening to JB Hi-Fi. This health, beauty, wellness... wearable sort of trend is huge. Watch JB Hi-Fi's product range evolve over the next few years. Everything from meta glasses to face masks that make your skin better, all this sort of stuff.
We're going to have so much more stuff to plug in at home. And JB Hi-Fi, it's only going to sell it if there's demand for it. And they say... You probably don't notice it day by day, but what we're selling in stores is changing a lot. And it's skewing towards this health, beauty, wellness category that's really come from nowhere.
Remember, it used to just be the supermarkets with an aisle of shampoo or whatever, and that's all we really thought of it. Well, now it's changing what the K-marts and the big department stores are selling. It's really bankroll chemist warehouses rise. It's changing JB Hi-Fi's product set.
Changing the supermarkets too. I saw Cole's boss, Leah Weckert, this week. The two products they cannot keep on the shelves at the moment are cottage cheese and high-protein yogurt. There you go. Everything to do with health and wellness-related products, including products for people who are on a Zempik and similar drugs, are flying off the shelves.
There you go. The third one, James, and then this comes back to what we were just talking about in the interest rate sections, is travel. Listening to Qantas' Vanessa Hudson, what economic slowdown? When they announced they were cutting capacity a few weeks ago, I wrote, surely that's a sign that they think the economy is softening.
but she says no it's just a price thing and it's just about managing price and trying to protect profits demand is no problem which sort of makes me wonder why they don't just increase prices without cutting capacity i mean that to me that sounds the more rational thing but i mean she says it's all part of the aviation sector's secret source that managing volume and price to get the best margin she said capacity is down 20 globally james in the aviation sector um because of the the oil price what's going on in the middle east with some of the middle east carriers
That's why prices are so high. But it's funny. I think we've been hearing, haven't we, ever since the pandemic, that Australians' propensity to travel is just going up and up and up.
Yeah. Again, it comes back to that asset thing. We're just so rich. We're just so asset rich, and those assets are flowing through and influencing the way we spend. Anthony, I love to know ā I always love this. I know it's very anecdotal, but which companies pull the biggest crowds? Because it's a great sign of who's hot and who's not.
The big caps, James, I'd say. Often it's the small caps that have people spilling out of the rooms. I reckon this year there was much more interest in the big caps. And I don't know if that's because some of them have been running hard or what. So Qantas, like I said, obviously very topical because of the oil price.
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Chapter 6: How is inflation affecting consumer behavior in Australia?
And don't forget to follow wherever you get your podcasts so you'll never miss an episode. At The Financial Review, we investigate the big stories about markets, business, and power. For more, go to AFR.com and you can subscribe to The Financial Review, the daily habit of successful people. Chanticleer was hosted by me, James Thompson, and Anthony McDonald. It was produced by Mandy Coulin.
Head of audio is Alex Gao, who also composed our theme. And the head of premium content is Fiona Buffini.