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Hold the Porsche, it could be a lean year for bank executive bonuses

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Reading between the lines in the letter sent to shareholders from Westpac chairman, Lindsay Maxsted makes it seems pretty evident that he won’t be asking investors to approve any short-term bonuses for executives this year.

Maxsted said the board was "determined to meet (shareholder expectations on executive pay) in 2019".

He said the board had heard the protests made by shareholders at the 2018 annual meeting - at which the remuneration report was comprehensively voted down. And he understood that the biggest gripe was that "the board didn’t apply enough downward discretion to short-term variable remuneration outcomes".

Westpac chairman Lindsay Maxsted. Credit:Trevor Collens

Of course, Westpac wasn’t alone in this mistake. ANZ and NAB also had their remuneration reports torpedoed by shareholders at their respective 2018 annual meetings.

Not only were shareholders upset at the weak share prices - in large part the result of expensive customer remediations - they were also livid that the board had the temerity to propose bonuses for executives that had presided over the behavioral mistakes that had contributed to the poor share prices and profit performances.


© Brisbane Times