Shareholders vented their anger at the board of scandal-plagued ANZ (ASX: ANZ) at today’s annual general meeting (AGM) with around 40% - well up on the required 25% - delivering the first strike against its executive pay scheme since the Hayne royal commission in 2018.
What has clearly ignited investor fury is the bank’s alacrity for stumbling from one crisis to another and a consecutive strike next year would effectively trigger a board spill and re-elect the company’s directors.
Revelations that the board of Australia’s fourth-biggest lender has mishandled the debacle surrounding market manipulation on its trading floors – which the regulator is now investigating – follows on the heels of allegations the bank wrongly withdrew fees from dead customers' accounts.
ANZ has admitted to inflating trading volume numbers to the Australian Government, which makes its bond issuances look more alluring. However, the bank’s internal review is yet to unearth sufficient evidence of the market manipulation it is being accused of.
Nevertheless, during his acknowledgement of today’s revolt by investors, ANZ chairman Paul O’Sullivan noted that the board was “deeply respectful” of the feedback it had received, and admitted the bank’s year had been difficult.
“As many shareholders are aware, our financial performance was overshadowed by issues related to our management of non-financial risks… this made it difficult to judge our performance,” O’Sullivan told investors at the AGM.
“Should new information come to light, the board has discretion to freeze or reduce future vesting to accountable executives.”
Allegations relate to the sale of the government bonds last year and the Australian Securities and Investments Commission (ASIC) is investigating whether traders manipulated a $14 billion federal government bond issuance for their own benefit, pushing up borrowing costs for taxpayers by millions of dollars.
Following allegations that the bank overstated the value of government bonds it traded by $50 billion-plus, banking regulator APRA signalled alarm bells over the bank’s culture. As a result, APRA wants the ANZ to hold an additional $250 million in capital.
Meantime at today’s AGM, ANZ also received a protest vote against its climate change policies. In short, a sizable shareholder cohort (27%) wants the bank to ensure the fossil fuel companies it lends to have a Paris Agreement-aligned transition plan.
As a result of today’s first strike, outgoing CEO Shayne Elliott, who will be replaced by former HSBC executive Nuno Matos on 3 July 2025, will forgo $3.2 million in bonuses.
Market concern over ANZ’s reputational damage saw the bank’s share price shed around 3% to $28.50 in early afternoon trade.
