Former ANZ boss sues bank after losing $13.5 million in bonuses

Former ANZ boss Shayne Elliott has launched legal action against the bank, arguing it breached an agreement it had with him, after it denied him $13.5 million in bonuses following a string of regulatory woes at the bank.

Elliott missed out on $13.5 million as part of the bank board’s push for accountability for a series of incidents that occurred while he was running the bank, including four court matters that were settled in September, with ANZ agreeing to pay a record $240 million fine.

The bonus cuts, which were revealed last month, also affected other former senior executives of the bank, but Elliott forfeited the most. On Friday, the bank confirmed Elliott had taken legal action relating to “remuneration outcomes” in the Supreme Court of NSW, after the case was first reported by The Australian.

Elliott, who left ANZ in May after more than nine years in the top job, signalled his case would argue the banking giant had breached its contract with him about the terms of his departure.

“The bank and I had a clear, unambiguous agreement about the terms of my departure. As you would expect, having entered into a contract, my expectation is that those terms would be honoured,” Elliott said in a statement.

“I accept the need for accountability, which is why I voluntarily proposed to the board that I would forgo my incentives in 2024. I have been left with no alternative other than to commence proceedings in the Supreme Court of NSW seeking a declaration that the bank has breached the contract that I had with it.

“I will be seeking the earliest possible hearing of my claim before the court and am fully committed to see this process through.”

ANZ said it was required to design pay arrangements in a way that encouraged prudent risk management, and linked pay to performance and risk outcomes. The bank said it also had to consider these outcomes when making decisions on releasing unvested shares to executives.

ANZ chairman Paul O’Sullivan said: “The board has been considered and very deliberate in its assessment of remuneration outcomes. We are confident in our position and we will defend this matter vigorously.”

The case comes as governance experts and investors have demanded accountability at ANZ over its run of problems. Whether there has been an appropriate level of accountability is likely to be a hot topic at the bank’s annual meeting next week.

Proxy adviser CGI Glass Lewis has advised investors to vote against ANZ’s remuneration report next week, citing “insufficient remuneration consequences”, after ANZ received a hefty protest vote of 38.3 per cent against its executive pay report last year, delivering it a “first strike”. In contrast, influential proxy firm Ownership Matters has advised investors to support ANZ’s remuneration report.

ANZ’s annual report, published in November, said neither Elliott nor his successor, Nuno Matos, had received a short-term bonus for the 2025 year, and the bank had also cancelled incentives that Elliott was due to receive.

The case promises to put the spotlight on the power that boards have to hold former executives accountable by withholding pay – an issue that often arises when a company is facing significant problems or damage to its reputation.

The ANZ board took the action against Elliott, and also decided to pay no short-term bonuses to its top Australian-based executives, after ANZ earlier this year agreed to a $240 million penalty to settle four separate legal cases from the corporate watchdog. In doing so, the bank admitted to unconscionable conduct on a major government bond deal, incorrect reporting of trading data and misconduct affecting nearly 65,000 customers.

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