The big banks and executive remuneration – where to from here?
At its annual general meeting yesterday, 33.4 per cent of ANZ’s investors rejected its executive remuneration report – well over the 25 per cent threshold required for a first strike. The ANZ Board is a relatively low scorer compared to Westpac where 64.2 per cent of investors rejected their bank’s remuneration report at the annual general meeting last week. The prize, however, for the biggest backlash against a remuneration report goes to NAB which scored a record 88.4 per cent rejection by its investors yesterday. The AFR called the result “staggering”; “stinging” was how The Australian put it. Just for comparison purposes, AMP copped a 62.2 per cent vote against its remuneration report earlier this year.
So what can be done by these three banks to avoid a second strike next year? Cutting back on excessive executive remuneration may go some way to appeasing the banks’ investors. After all, the Commonwealth Bank did not receive a strike after it cut out short—term bonuses for senior executives. But will this be enough? It makes one wonder how much time will be spent around the boardroom table dealing with this issue in preparation for next year’s AGMs – and at the expense of what else?