ANZ faces second strike risk as top adviser urges vote against executive pay
ANZ’s board recently stripped former executives of $13.5m, but major proxy adviser CGI Glass Lewis has urged investors to still reject the bank’s pay report.
ANZ investors are being encouraged to vote against the bank’s pay report by independent proxy adviser CGI Glass Lewis, potentially risking a second strike at its upcoming AGM.
Last month, ANZ stripped former executives of a combined $32m in bonuses, with former CEO Shayne Elliott being denied a whopping $13.5m. New boss Nuno Matos, who took over from Mr Elliott in May, recently told a parliamentary select committee that it was “one of the most severe demonstrations of accountability” he had witnessed in his career.
But Glass Lewis, an influential proxy recommendations firm which advises institutional investors on how to vote at annual general meetings, has recommended ANZ investors vote against the baking major’s remuneration report at the bank's AGM on 18 December.
The report, seen by The Australian, told investors there has been “insufficient remuneration consequences”, despite acknowledging that the latest action against former executives constituted a “more meaningful response”.
But it questioned whether Mr Elliott’s treatment is “proportionate, given the scale and duration of the underlying failures and the fact that a considerable portion of (his) restricted rights remains on foot”.
“Additionally, the Company’s presentation of the remuneration consequences relied on a headline figure that included incentives forgone due to missing annual performance targets, rather than clearly distinguishing the amounts forfeited specifically due to the (non-financial risk) matters,” the report stated.
The report noted that a “considerable portion” of Mr Elliott’s package is unaffected, including around $2.8m of deferred equity vested in late 2025 and equity with a face value of around $7.9m which remains on foot.
“Given the scale and duration of the underlying failures, investors may reasonably question whether the consequences imposed were sufficiently stringent,” the report stated.
It also highlighted that Mr Matos does not own any shares in the company and suggests he should be expected to change this to ensure his interests are aligned with shareholders.
Last December, ANZ suffered a first strike on its pay report after more than 38 per cent of shareholders voted against it. A second strike risks a vote to spill of the board. However, Glass Lewis advises shareholders vote against this.
“A spill resolution would only be supportable in circumstances where no substantive improvements have been made to the board, the remuneration committee or (ANZ’s) remuneration practices, and where the removal of multiple directors could reasonably be viewed as advancing shareholders’ best interests,” the report stated.
The Glass Lewis report detailed various regulatory failings at the bank over the past few years, including the treasury bond trading scandal, the misreporting of trading data and alleged workplace misconduct.
These various scandals resulted in ANZ being slapped with a record $240m fine from the corporate regulator in September.
Glass Lewis also recommended investors vote for all nominees to the board, including chair Paul O’Sullivan who has said it will be his last term.
“While Chair Paul O’Sullivan bears clear accountability for the board’s slow response to emerging risks, he is also the only current director with more than five years’ tenure,” the report states.
“On balance, shareholders can support his re-election for a final term to provide stability through the transition and oversee an orderly handover to his successor.”
Ownership Matters, another large proxy advisory firm, is understood to have recommended investors vote for all of the ANZ board’s recommendations, including the remuneration report.
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Originally published as ANZ faces second strike risk as top adviser urges vote against executive pay
