Westpac’s shareholders have delivered a second strike to the bank at its annual meeting, forcing a board spill motion.
But the directors survived, with that spill rejected by more than 90 per cent of votes cast.
Westpac’s board fronted shareholders for the first time since it was charged with breaching anti-money laundering laws 23 million times and inadvertently facilitating payments for child sex abuse.
At its annual meeting in Sydney on Thursday, the bank potentially faced a massive protest vote against the re-election of its directors.
One particularly angry shareholder, former Labor senator Chris Schacht, stole the show by berating Westpac’s board in front of all the attendees.
“I cannot think of anything on human rights, except for murder, that is worse,” he said.
“How the hell did this go on for five years? AUSTRAC warned you last year, and the year before.”
Other investors in the room were also outspoken in their anger.
“This board does not deserve to continue in its current form,” said Dr Peter Brandon, the head of activist group Banking Reform Now.
“At best, those serving are incompetent or negligent … at worst complicit and culpable.”
All directors up for re-election at the meeting have survived individual votes on their positions, although Peter Marriott recorded only a 58 per cent vote in favour. That is extremely low – most directors of ASX 200 companies generally get votes in favour of 90 per cent or more.
However, Westpac failed to avoid a “second strike” on its executive remuneration report, with 35 per cent of shareholders voting against, above the 25 per cent quota for a “strike”.
Shareholders voted overwhelmingly for a “first strike” at last year’s AGM. About two-thirds voted against how much Westpac executives were getting paid in light of the “fee for no service” scandal uncovered at the banking royal commission.
The second strike meant a motion was moved to spill the board. However, the spill was averted as Westpac managed to secure the backing of major investors, such as the Australian Council of Superannuation Investors, with 91 per cent of votes cast against sacking the entire board.
‘We are deeply sorry’
Chairman Lindsay Maxsted – who was pressured to bring forward his retirement – kicked off the AGM with an apologetic tone.
“The board is deeply distressed … we are devastated that anyone may have been exposed to harm,” he said.
“We are deeply sorry … you believe in this company and we let you down.”
The chairman said the board has taken a 20 per cent pay cut, and reduced “some” short-term bonuses to zero.
He also promised “more will be done” to make sure a crisis like this does not happen again.
However, Mr Maxsted did not provide substantial updates about the financial crime regulator’s lawsuit against Westpac.
“As legal proceedings are ongoing, we don’t yet have all the answers.”
One shareholder called out: “You are proving your incompetence every time you open your mouth!”
This was one of several instances where Westpac’s board was heckled – to the rapturous applause of other audience members.
The allegations that Westpac might have facilitated money laundering to such a scale also led to the forced resignation of its chief executive Brian Hartzer – with a $2.7 million payout, but no bonus.
His replacement, acting CEO Peter King, also addressed shareholders and said he was “personally devastated” by the allegations.
Mr King pledged to work with child welfare experts to help avoid the “terrible impact of child exploitation”.
By 12.25pm (AEDT), Westpac’s share price was down 0.9 per cent to $24.17 – and has plummeted by almost 20 per cent since late-September.