ANZ won’t hesitate to wrest more bonuses from executives, says chair

The chairman of ANZ has indicated it may seek to claw back more bonuses from its executives following a string of misconduct cases across the bank recently, with the major lender receiving its second strike in as many years at its annual general meeting on Thursday.

Paul O’Sullivan told shareholders ANZ would continue to make decisions regarding unvested equity for its former executives as needed, despite the bank currently facing legal action from former chief Shayne Elliott over its denial of $13.5 million in bonuses.

“I want to be really clear the board can – and will – make future adjustments where appropriate,” he said.

“This methodical assessment over an extended period is consistent with the intent of the law, in terms of regulation, following the royal commission, ensuring accountability and alignment over time.”

ANZ has already stripped current and former executives of $32 million in pay in an attempt to show accountability for multiple cases of misconduct at the bank over the past few years. Much of the company’s board and executive team have also been replaced.

However, Angus Gluskie, managing director at ANZ shareholder Whitefield, said he believed the bank should instead be focusing on the future, and that clawing back millions from former executives may be more trouble than its worth.

“I understand that [O’Sullivan] has to strike a balance, and they’ve gone a reasonable way towards finding the dividing line on [recouping remuneration], which, I think, is somewhere close to the mark,” he says.

“But the far more important thing than quibbling about where exactly where that line’s drawn is making sure that they’ve got a good executive team going forward, who can do a good job at making sure these problems don’t occur in the future.”

In September, ANZ agreed to a $240 million penalty to settle four separate legal cases from the corporate watchdog ASIC, including ANZ’s role as manager in the issuance of a 10-year government bond, where ASIC accused the lender of acting unconscionably.

ANZ also cut 3500 jobs during the year, with newly appointed chief executive Nuno Matos facing significant backlash from staff who disagreed with his ambitious change agenda.

The cost of the redundancies, alongside the fines and other penalties paid by the bank, resulted in ANZ reporting a 14 per cent fall in cash profits to $5.8 billion in the last financial year.

The company revealed 32.3 per cent of shareholders had voted against the bank’s executive pay scheme, above the 25 per cent required to be considered a “strike” and allowing investors to spill the board and re-elect the company’s directors.

Those resolutions did not pass, however, with just 1.45 per cent voting in favour of a spill.

Major proxy firms ISS and CGI Glass Lewis recommended their clients vote against the remuneration report, saying that some investors “may question whether the consequences are proportionate, given the scale and duration of the underlying failures”.

At Thursday’s AGM, Matos acknowledged the bank’s failings throughout the year, saying as chief executive, he was “ultimately accountable”. “Despite our good intentions, we have not consistently lived up to the expectations of our customers across all of our businesses,” he said.

“I want to stress to you today that we are going to get back to growth by getting back to basics and relentlessly focusing on customers across every segment and business of ANZ.”

Matos, along with the rest of the company’s Australia-based executives, will not receive any short-term bonuses for the last financial year due to the regulatory failings.

Both Matos and O’Sullivan drew the ire of a number of shareholders during the at times combative AGM, with the executive duo facing multiple questions on the company’s climate commitments, the ASIC penalties, and its sacking of employees.

Shares in the lender were flat just after lunchtime at $36.08.

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