Commonwealth Bank Statement
13 February 2003
The Commonwealth Bank today responded to the statement by Mr Chris Cuffe as follows:
Mr Cuffe’s statement did not include reference to the new contract he entered into with Colonial in January 2000. This contract included a $10m retention payment, provided he was employed by Colonial on 30 June 2002 and clauses covering his position if Colonial was acquired.
- The bonuses paid under this contract were based on a percentage of net revenue, as defined in the contract, and not profits generated by Colonial First State.
- The Bank did attempt to renegotiate Mr Cuffe’s January 2000 Colonial contract following completion of the merger. Under his Colonial contract, he had the right to leave the Bank within three months of the merger, in which case he would receive a payment of $19.5m. On the other hand, if the Bank elected not to retain Mr Cuffe’s services, it was required under his contract with Colonial to pay Mr Cuffe $29.5m.
- The Bank entered into a new contract with Mr Cuffe in August 2000, which effectively replicated his previous contractual position. A subsequent contract was entered into by the Bank in February 2002.
- The Bank has previously acknowledged the significant contribution Mr Cuffe made to the growth and development of the Colonial First State business.