ANZ CEO Forgoes $2 Million Bonus Amid Shareholder Backlash
Regulatory Investigations Spark Controversy
The CEO of Australia’s fourth-largest bank, ANZ, has relinquished a long-term performance bonus worth $2 million due to intense shareholder criticism. The decision comes as the bank faces investigations by the Australian Securities and Investments Commission (ASIC) into suspected misconduct in a 2023 government bond issue.
Shayne Elliott’s Nine-Year Tenure
Shayne Elliott, who will step down as CEO in mid-2025, was initially awarded the bonus but required shareholder approval. However, shareholder adviser groups indicated they would only support the bonus by a narrow margin, prompting the bank to withdraw the resolution at Elliott’s request.
Chairman Paul O’Sullivan’s Statement
“In recognition of shareholders’ views, and to limit the impact on the bank, Shayne has decided to forfeit this year’s long-term variable remuneration,” O’Sullivan stated at the annual meeting in Melbourne, receiving applause from attendees.
Investigation into Bond Issuance
When questioned about the bond issuance investigation, O’Sullivan assured shareholders that the bank had found no evidence of intentional wrongdoing. Meanwhile, shareholders voted 38% against the company’s executive remuneration report, significantly higher than the 25% required to defeat the resolution.
Consequences of the Vote
Although the non-binding vote has no immediate consequences, it may lead to further action if the company’s remuneration report receives a “no” vote for two consecutive years. In such a scenario, shareholders may call for another vote on whether to remove the entire board.
Proxy Firm’s Criticism
CGI Glass Lewis, a proxy firm, expressed disappointment with the remuneration consequences applied to executives in 2024, deeming them insufficiently punitive given the scale of the issues the company has faced.
New Challenges Ahead
Elliott’s successor, Nuno Matos, will inherit two pressing challenges: leading the bank’s response to the ASIC investigation and its own review of non-financial risk, as well as integrating ANZ’s $4.9 billion purchase of Suncorp’s bank assets.
Regulatory Pressure
The Australian Prudential Regulation Authority has increased the amount of cash ANZ must hold, citing concerns about the company’s non-financial risk management. ANZ shares fell 2.5% on Thursday, in line with other large lenders and the broader Australian market.
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