Former NAB chief executive Andrew Thorburn will receive a $1 million payout for his early departure from the bank, but will miss out on a potential windfall of more than $20 million.

In a release to the ASX on Wednesday morning, NAB said: “In accordance with his contractual entitlements, Mr Thorburn will receive payment of $1,041,449 in lieu of 26 weeks’ notice, along with accrued leave entitlements.”

“All Mr Thorburn’s unvested deferred awards will be forfeited in accordance with plan rules,” NAB said.

Director at corporate governance and proxy advice firm Ownership Matters, Dean Paatsch, said unlike most workers, executives received generous deals on the way out, and often saw a fair portion of their long-term bonuses paid years after they leave.

“In the alternative reality of executive remuneration, this looks like relatively harsh treatment,” Mr Paatsch noted.

“However, at the close of play, he’ll get something like another $6.7 million he ‘earned’ from share bonuses already banked.”

At the bank’s current share price of $24.60, the value of Mr Thorburn’s unvested 883,000 shares was in the order of $21.7 million.

However, that is a purely hypothetical figure based on everything going to plan. It didn’t, nor was it likely to.

National Australia Bank has had more misfortunes than its big four rivals over the past two decades, many self-inflicted.

“The idea he has lost $22 million is wrong,” Mr Paatsch said.

“To fully vest those shares, the bank would have had to beat the market and its peers; the chance of that happening is zero.”

Mr Thorburn’s base pay at the time of his departure was $2.4 million.

Having worked at the bank for 10 years, he had accrued a full three months in long service leave entitlement he was planning to take just before his hurried resignation.

That is likely to be worth another $800,000.

Mr Thorburn will leave the bank at the end of the month having been singled out for stinging criticism at the financial service royal commission’s final report.

NAB chair sidelined from CEO search

NAB chair Ken Henry, who also came in for a special and uncomplimentary mention, said he would leave the bank once Mr Thorburn’s replacement had been found.

Earlier this month, Commissioner Kenneth Hayne said he had doubts the NAB had learned from its past mistakes, and criticised Mr Thorburn’s characterisation of the fees-for-no-service scandal as “nothing more than carelessness”.

Dr Henry has been sidelined from the search for a new chief executive with the board setting up two committees to find a new leadership team.

“The Chairman Selection Committee will be chaired by NAB director David Armstrong and the CEO Selection Committee will be chaired by NAB director Ann Sherry,” NAB’s statement said.

“Other committee members will be selected from the board. The chairman [Dr Henry] will not be a member of either committee.”

NAB’s board also finalised pay conditions for interim CEO and current director Philip Chronican.

While the search is under way, Mr Chronican will receive a fixed monthly fee of $150,000 including superannuation, representing an annualised remuneration of $1.8 million.

He will not be eligible for any variable remuneration, nor will he receive non-executive director fees while in the Group CEO position, the bank said.

–ABC