CBA faces a remuneration revolt

Despite a last-minute appeal, Commonwealth Bank has done too little, too late to ensure its remuneration report crosses the line.

CBA’s Turner is presiding over his last CBA annual meeting today. Picture: Adam Yip/The Australian.

Outgoing Commonwealth Bank chair David Turner has attempted a cosmetic appeal to shareholders ahead of a certain defeat of his remuneration report at today’s annual meeting.

The bank withdrew one motion which covered long-term incentives to CBA boss Ian Narev, but this simply means he is in line to receive the same 55,443 shares — it’s just they will be governed by the hurdles approved by shareholders last year.

The move comes as Westpac released its annual report showing just three of the 12 executives listed received their full short-term bonus. This included consumer bank boss George Frazis, business bank boss David Lindberg and CFO Peter King.

This meant chief Brian Hartzer in bank parlance effectively received a pay cut, as he only picked up 87 per cent of a potential 150 per cent short-term bonus.

Still, with the proxy advisers already mumbling about the generous bonus allowances paid at the ANZ, the Westpac allowances look modest by comparison.

Between 2012 and 2015, out of 45 bonus payments made just four were below target.

This time nine of the 12 were below target.

Hartzer will still be able to pay the rent, with cash pay of $2.8 million plus a $1.3m cash bonus, with another $1.3m plus $1.03m in long-term incentives to provide a total pay of $5.1m.

The Westpac boss cashed in the 332,000 shares he was awarded in 2012 as sign-on bonus to help pay for his Vaucluse digs.

At first glance Westpac will received a tick from the proxy firms for not paying full short-term bonuses in a year of flat returns, while ANZ will received a big cross for paying near maximum bonuses on poor returns.

CBA’s Turner is presiding over his last CBA annual meeting today before handing over to Catherine Livingstone.

This year the hurdle was to include 50 per cent measured on financial returns, 25 per cent on comparative customer support and 25 per cent people and communities.

In the 2015 hurdle the ‘people and communities’ category didn’t exist, and instead 75 per cent of the long-term grant was based on financial returns.

The change was sold as a sign the bank was listening to shareholder concerns but by today most votes would have been lodged already and the bank did too little too late.

In 2015 Narev pulled in $12.3m, including $6.8m in long-term shares, which meant he was effectively paid the same as 246 bank tellers.

Last financial year he was paid just $6.8m, or the equivalent of 136 tellers.