NAB investors revolt against banking giant pay report
National Australia Bank has been hit with a massive shareholder backlash at its annual general meeting with more than 80 per cent voting against its remuneration report.
Business
Don't miss out on the headlines from Business. Followed categories will be added to My News.
National Australia Bank has been hit with a historic shareholder backlash as investors big and small take aim at the nation’s financial chiefs.
A record 88.4 per cent of votes at NAB’s annual meeting have been cast against its remuneration report in the biggest protest vote for a blue-chip company in Australian corporate history.
The slap-down — the first pay strike received by NAB — was delivered in Melbourne on Wednesday at a marathon three-and-a-half hour annual meeting, where shareholders savaged the bank’s board and executives.
NAB REJECTS CALL TO EXTEND COMPENSATION
BANKING INDUSTRY’S MOST DISGRACEFUL ACTS OF GREED
BANK BILL TO REPAY RIPPED-OFF AUSSIES PUSHING $5B
It came as rival ANZ also absorbed a first strike over its pay arrangements with a more subdued 33.8 per cent of votes cast against its remuneration report at the bank’s annual meeting in Perth.
Westpac last week suffered a first strike at its annual meeting as 64.2 per cent of shareholders voted against its remuneration report.
The revolt at NAB comes after key senior managers, including chief executive Andrew Thorburn, received bonuses in a year the financial services royal commission heard the company may have engaged in criminal offences.
NAB chair Ken Henry on Wednesday announced the bank would scrap a new pay plan for executives that shrunk short and long-term bonuses into a single variable payment and dropped a direct link to total shareholder return.
“We tried but we got it wrong,” Mr Henry told shareholders at the Melbourne Convention and Exhibition Centre.
“We are listening to you. We will try again.”
The “no” votes are non-biding, meaning they do not result in a clawback of payments made to bank executives. But the shareholder revolt does raise the prospect of the boards at three of the nation’s big-four banks being voted out at their annual meetings next year.
The Commonwealth Bank operates on a different financial timetable and escaped a pay strike at its annual meeting in November.
A company receives a pay strike if at least 25 per cent of shareholders’ votes go against its remuneration report.
If it receives pay strikes two years in a row, shareholders can then vote for a spill of the board.
In a separate vote on Wednesday, NAB shareholders also protested against awarding long-term share bonuses to Mr Thorburn.
The impact of that vote — 63.6 per cent against — is again largely symbolic given Mr Thorburn is eligible to receive the bonus payments as cash under his contract.
Australian Shareholders’ Association representative Dennis Shore told the meeting no bonuses should have been paid this year given the pall hanging over NAB and the wider finance industry.
The backlash against NAB also follows an appearance by Mr Henry at the royal commission that was widely regarded as tone deaf and comes as Mr Thorburn gets ready to take a period of extended leave, raising questions about his tenure at the lender.
In Perth, ANZ chair David Gonski said there was “heightened community concern” about how corporate executives were paid.
“The board acknowledges the very real concerns of those who have voted against the report and I assure you we will continue to work hard in 2019 to ensure further alignment between compensation and shareholder interests,” Mr Gonski said.
The high-profile business figure said the royal commission highlighted conduct by ANZ and the broader financial industry that “is of a standard below what the community expects, and in some cases what the law requires”.
“In the past we were at times too focused on the short-term profit of the group, rather than the long-term sustainability of our relationships and our obligations to all our stakeholders,” Mr Gonski said.
Shares in NAB gained 0.8 per cent to close at $23.32. Shares in ANZ put on 1.1 per cent to $23.94.
How the NBN has delivered just in time
The NBN has delivered, and it has done so in what can only be described as the ultimate — the hit-the-ground running immediate — stress test, rites Terry McCrann.
Sydney airport the wrong place at the wrong time
Sydney Airport has some of the sweetest acreage in Australia but when passengers numbers have dwindled from 9 million in the March quarter to 400,000 in the June quarter, that doesn’t count for much, writes Terry McCrann.