Furious Westpac shareholders have slapped a second strike on the bank, as investors confronted the firm for the first time since its child sex and money laundering scandals.
At the Australian bank’s AGM in Sydney on 12 December, an overwhelming 35% of shareholders voted against the company’s remuneration report – resulting in a second strike.
The first strike occurred at last year’s AGM, after two-thirds of shareholders voted against the amount Westpac executives were being paid in light of the “fee for no service” scandal uncovered at the banking royal commission.
While both strikes formed a board spill motion, the embattled bank has so far managed to avoid this from happening after more than 90% of votes cast rejected to sack the entire board.
The latest AGM came just a month Australia’s foremost financial intelligence agency, Austrac, launched legal action against Westpac – accusing it of more 23 million breaches of anti-money laundering and counter-terrorism finance laws involving $11bn in transactions, including transfers potentially linked to child exploitation and sex abuse.
In a statement, Austrac said Westpac had failed to “carry out appropriate due diligence on customers sending money to the Philippines and South East Asia for known child exploitation risks”.
This led to the forced resignation of the company’s chief executive Brian Hartzer, although he still walked away with a $2.7m payout, albeit with no bonus.
Speaking at the AGM, incensed attendee Dr Peter Brandon, head of activist group Banking Reform Now, told Westpac’s board that it “did not deserve to continue in its current form”.
Westpac Chairman Lindsay Maxsted, who has brought forward his retirement following the scandals, spoke with remorse at the AGM, stating that bank – which is one on the largest in Australia – had let investors down.
Trying to placate shareholders, he said the board had taken a 20% pay cut, and reduced some of its short-term bonuses to zero, while the firm was working to ensure these recent disasters never occurred again.
While all Westpac directors up for re-election at the AGM dodged an ousting, director Peter Marriott clocked a low 58% vote in favour of staying put – compared to the industry standard of 90%.Last Updated: 20 December 2019