Furious investors demand 'incompetent' Westpac bosses hand back fees
Furious Westpac investors have roasted the board and called for directors to hand back their fees over the bank's child exploitation scandal.
Outgoing chairman Lindsay Maxsted faced more than two hours of questioning at a marathon annual general meeting on Thursday, with shareholders demanding to know how Australia's second largest bank will atone for allegedly allowing money transfers that could be linked to child abuse in Asia.
One shareholder called the board "at best incompetent and negligent, and at worst complicit and culpable", while others demanded further accountability beyond the departure of Mr Maxsted and chief executive Brian Hartzer.
"You should go now, you should all go," one shareholder said to applause.
"But before you do, you should hand back your fees."
With last year's remuneration report voted down by 64 per cent of investors following the bank's royal commission mauling, shareholders could hand Westpac a second strike and trigger a vote on whether to spill the board.
But a spill remains highly unlikely despite the anger as investor groups seek to maintain stability at an institution that has lost its CEO and is preparing for the departures of Mr Maxsted and risk and compliance committee chair Ewan Crouch.
Mr Maxsted admitted the scandal-hit bank did not act quickly enough to implement "robust" monitoring of money transfers potentially linked to child abuse but said the remuneration adjustments made to date were adequate.
"The whole remuneration piece for 2020 will be judged by the board going through 2020," Mr Maxsted told shareholders in Sydney on Thursday.
"We do have lots of contractual arrangements in place, I do think that what we have don so far with regards to remuneration has been adequate, but I understand you might not agree, and other people here might not agree."
The chairman has also defended the final pay packet of Mr Hartzer, stating the $2.7 million fixed income to the end of his 12-month notice period was not "overly generous".
The board has scrapped 2019 short-term bonuses for executives and several members of the general management team, subject to the outcome of an external investigation into the AUSTRAC allegations.
Mr Maxsted told his final AGM meeting as chairman that, while Westpac identified and filed suspicious matter reports on the customers whose transfers led to legal action by the financial crimes regulator, the bank was too slow to act.
"We should have implemented more robust transaction monitoring earlier than we did," Mr Maxsted said.
"This would have generated more suspicious matter reports to AUSTRAC."
The bank faces potentially billions in fines over allegations it breached money laundering laws 23 million times and failed to properly monitor payments potentially linked to child sex offences in south east Asia.
The alleged breaches led Westpac to shut down international transfer platform LitePay, with IBM Company Promontory appointed to head the bank's accountability and financial crime program review.
The bank's response plan is expected to lead to $80 million in FY20 pre-tax expenses.
Customer remediation in the wake of the financial services royal commission and exiting advice business already reduced cash earnings by around 15 per cent - or $1.1 billion - in FY19 and the bank cut its final dividend.
Peter King, who was appointed acting CEO when Mr Hartzer departed two weeks ago, said the low growth environment, the threat of even lower interest rates and regulatory challenges are likely to persist in FY20.
Shares in the bank were 1.03 per cent lower at $24.13 by 1250 AEDT Thursday - and have slipped 9.1 per cent since the AUSTRAC allegations were aired last month.
That's wiped about $8.7 billion from the company's market capitalisation.