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New fight brewing over banker pay as bonuses in spotlight

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20.09.2019

Some of the most powerful investors in the Australian sharemarket have recently revealed how they voted in last year's annual general meetings. It's not a pretty picture for three of our biggest banks.

National Australia Bank's executive pay packets were comprehensively rejected by giant American asset managers Vanguard and State Street, and our very own Future Fund. BlackRock, the biggest asset manager in the world, abstained after lengthy consultation with NAB, which copped a record-breaking vote on executive pay.

Illustration: Matt DavidsonCredit:

Westpac's remuneration report was also knocked back by the Future Fund, while State Street and BlackRock abstained, and Vanguard gave its support.

ANZ Bank copped a rebuke from the Future Fund and received support from the big three index funds, which automatically own a big chunk of all large listed companies in Australia. Only Commonwealth Bank's remuneration report got the tick of approval from all four of these investment giants.

That there was a general investor revolt against NAB, ANZ and Westpac is old news, but the individual votes of these enormous investors were only disclosed in the last couple of months, due to the funds' reporting cycles. The dissent reflects the deep frustration over boards' failure to show "discretion" when dishing out executive bonuses against the backdrop of a royal commission.

That pressure on directors will only intensify this year as boards try to placate grumpy investors before their AGMs, while also navigating another fight that is brewing over banker pay.

And........

© The Age