Showdown looms at Commonwealth Bank AGM over Matt Comyn bonus

A proxy split sets the scene for a close AGM vote over a $1.6m equity grant to Commonwealth Bank CEO Matt Comyn.

AGM heat is expected over a $1.6m equity grant to CBA chief executive Matt Comyn. Picture: Britta Campion

Commonwealth Bank’s annual meeting is set for a showdown with two of the three proxy services supporting a $1.6m equity grant to chief executive Matt Comyn.

As reported in The Australian on Thursday, ISS is recommending against the equity grant and the CBA remuneration report.

But Ownership Matters and CGI Glass Lewis are both recommending in favour of both the equity grant and the remuneration report.

CBA has made significant changes to its executive pay structure this year, with more weight on long-term variable performance. Mr Comyn gets fixed pay of $2.3m, a short-term bonus of $2.2m and long-term bonus of $1.6m.

Short-term bonuses were awarded to a maximum of 150 per cent of fixed pay but this has been cut to 94 per cent.

Long-term pay was up to 180 per cent of fixed pay but this was cut to 140 per cent, of which half is paid in stock deferred for four to five years.

This gives the board a greater ability to wind back pay in light of subsequent events like the Westpac Austrac settlement.

Ownership Matters and CGI have expressed misgivings about the plan but have endorsed the present CBA board’s preparedness to take a tough line on pay issues.

This is in contrast to past boards before Catherine Livingstone became chairman.

CBA has also outperformed the other big banks on stock price and operations in the past year.

ISS tends to have a strong following with offshore passive funds while Ownership Matters has a strong following with industry funds.

Heading into the October 13 annual meeting, given the split recommendations, analysts say the pay vote will be close.

Separately, Commonwealth Bank says it had a total of 174,000 temporary loan repayment deferrals as of August 31, down from 182,000 in July and 210,000 in June.

The bank’s loan deferral balances totalled $59bn, down from $62bn in July and $67bn in June.

“Since the onset of the pandemic, our priority has been to do what we can to assist our customers in managing the challenges of COVID-19, including providing temporary loan repayment deferrals on approximately 250,000 home, personal and business loans,” Mr Comyn said.

“As we approach the end of the initial deferral periods, we have been contacting all customers with deferred loans to talk with them about their options, including returning to full or part-time payment, or converting their loans to interest-only.

“Many of those contacted will be able to recommence their repayments.”

His comments come after the latest APRA data revealed that as of August 31, 8.5 per cent of loans in Australia had been deferred, totalling $229bn.

Exits from deferral outweighed new entries for the second straight month in August, with $24bn loans expiring or exiting deferral, while $14bn entries had been approved or extended.