If you ask me, NAB has poor management

The annual meeting of the National Australia Bank Limited (ASX:NAB) will generate questions from shareholders and the Finance Sector Union. However,shareholders will also be asked to approve a $1 million retention incentive for the bank's finance officer as part of a package of short-term share incentives for senior managers, including CEO John Stewart. The Finance Sector Union is concerned over the relocation of jobs to India, as 250 credit-processing jobs have already gone. NAB shareholders are generally content, as the bank's share price rose by 20% in 2006.

I have to ask why the banks finance officer thinks he should get a $1 million retention incentive. Any sane person could produce the same result without the incentive. This looks like management trying to scratch each others back and wasting shareholder money. Banks make money cause the have lots of fees, they don't make it cause they have this one person on the team. If National Australia Bank was making a higher profit margin than the other banks then I could understand some sort of incentive but $1 million is way too steep and seems ridiculous.

While banks are a good investment long term you need to have the right type of managers in place that will not abuse the system and NAB does not look like they have it sorted yet. I will steer clear of NAB and instead look to invest in the management of other banks such as Macquarie Bank Limited(ASX:MBL) and St George Bank Limited (ASX:SGB). At least I have confidence in the management of these other banks.

Good Luck Investing

Shareholder Incentive Schemes

There is an intersting article in the Age today on shareholder incentive schemes ( also known as shareholder benefit schemes). Discount and benefit schemes encourage new investors in the companies concerned, whilst maintaining loyalty and support from existing shareholders.

Coles Group Limited (ASX:CGJ) had the best known incentive scheme a while back with the Coles Myer discount card but that was elimiated in 2002 due to a lack on instituional support.

Banks such as St George Banking Limited (ASX:SGB) and Commonwealth Bank Limited (ASX:CBA) do not offer specific shareholder incentives but loyalty programs exist for the ANZ Banking Limited (ASX:ANZ), Westpac Banking Limited (ASX:WBC), National Australia Bank Limited (ASX:NAB) and Bank of Queensland Limited (ASX:BOQ).

The ANZ Bank has revealed that it is evaluating its shareholder incentives at the moment.

One of the best incventive schemes I could find a few years ago was Club Crocodile Holdings Ltd. This is now named Ocean Capital Limited (ASX:OCE) . It use to be investors with a minimum 15,000 shares were entitled to five free nights per year for two at either of the company’s two Whitsunday resorts. However while the Shareholder accommodation discounts at the properties remain a benefit to shareholders the format is now different. Shareholders now recieve a discounted standby rate of the property without the restrictions normally applied to standby rates. This benefit is available to all shareholders irrespective of the number of shares held.

The only list I can find available is rather old (1999). It is available here.

I will try and create an updated list myself if I get some time.

Good Luck Investing.