First strike for Westpac and NAB at AGMs is locked in as shareholders take aim at directors too

Westpac and NAB are certain to suffer first strikes at their upcoming AGMs, with directors also set to come under fire.

Westpac signage in Sydney. Picture: AAP

The way the numbers have been falling, Westpac is certain to suffer a first strike on its remuneration report at its annual meeting in Perth on Wednesday.

In fact, such is the level of hostility towards the major banks, the word on the street is that the “no” vote will go significantly higher than the 25 per cent threshold required for a first strike.

The irony is that Westpac has emerged as the industry’s “least worst offender” in the royal commission.

Meanwhile, investors in surprise villain National Australia Bank will be armed with baseball bats for the bank’s December 19 annual meeting in Melbourne.

Again, the “no” vote on the remuneration report will easily surpass 25 per cent.

Pundits are less confident about the level of demonisation faced by ANZ Bank, which partly reflects the agreeable patter of chief executive Shayne Elliott.

Either by design or good fortune, Elliott seems to have struck an acceptable balance between kneejerk contrition and offering some glimmer of hope for the future.

While the fate of the remuneration reports will attract the headlines, given a second consecutive strike can lead to a board spill, strong protest votes are also expected against some high-profile directors.

Heading the list is Westpac non-executive director Craig Dunn, followed by his counterpart at ANZ Paula Dwyer.

Dunn has earned the wrath of shareholders over his chief executive role at scandal-plagued AMP from 2008 to 2013.

Now that investors see zero short-term bonuses as an aspirational target in the banking industry, his role as chairman of the Westpac remuneration committee has not helped his cause, either.

Proxy advisory firm Ownership Matters has targeted Dunn, saying the royal commission has highlighted the poor outcomes delivered by AMP to shareholders and customers during his tenure.

“(Also), no Westpac executive received less than 50 per cent of their target bonus for the 2018 financial year, and only three executives received less than 80 per cent of target,” OM said.

Dwyer is seen as fair game as a relatively long-serving director since 2012, as well as chair of the audit committee.

She’s also the chair of Tabcorp and Healthscope, which have had their own issues.

It’s hard to recall a more toxic period for shareholder relations with the major banks.

However, defeat of the remuneration report carries little sting because it’s a non-binding vote.

The true measure of activism will be the strength of the vote against directors.

The bar is set extremely low, with the average vote in favour of an incumbent non-executive director running at about 96 per cent.

That’s why any “no” vote against a non-executive director that runs well into double digits will send a strong message.

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