AAP Finance

Scandal-hit Westpac bracing for AGM fury

By AAP Newswire

Westpac is bracing for a barrage of investor angst and the threat of a board spill at an annual general meeting likely to be dominated by the bank's money laundering and child exploitation scandal.

The nation's oldest bank is expected to cop a second strike against its remuneration report and a significant protest vote against the re-election of director Peter Marriott amid allegations it breached money laundering laws 23 million times and failed to properly monitor payments potentially linked to child sex offences.

If 25 per cent or more of shareholders reject Westpac executives' pay packets on Thursday, an automatic vote will be triggered as to whether the bank will hold a spill meeting and potentially clear the decks of directors.

Last year's remuneration report was voted down by 64 per cent of investors after Westpac was dragged over the coals at the banking royal commission.

The prospect of a spill meeting is highly unlikely though, as investor groups seek to maintain some stability at an institution that has already lost its chief executive Brian Hartzer, and is preparing for the imminent departures of chairman Lindsay Maxstead, and director Ewan Crouch.

Mr Hartzer has already stepped down in the wake of the damaging AUSTRAC allegations and has been replaced on an interim basis by chief financial officer Peter King, while Mr Maxsted will no longer seek re-election at the AGM and instead retire in "the first half of 2020".

Mr Crouch, chairman of the bank's risk and compliance committee, has also quashed his re-election bid, with fellow director and risk committee member Mr Marriott set to cop a significant vote against his re-appointment at the meeting in Sydney.

The Australian Council of Superannuation Investors, as well as proxy advice firms Ownership Matters and CGI Glass Lewis, are recommending support for the bank's pay report on Thursday, but advisor ISS and Australian Shareholders Association are not.

ASA director and Westpac company monitor Carol Limmer said the bank's executives and board should have shown greater collective accountability for its alleged failures, include that the bank knew of the heightened child exploitation risks associated with frequent low value payments to Southeast Asia in 2013, but did not act for several years.

"We think (all) short term incentives should have been reduced to zero, instead of merely being frozen pending any further investigations," Ms Limmer said.

Ms Limmer said it the ASA - which represents more than 2,000 Westpac shareholders - would also oppose the re-election of Mr Marriott, who has been on the Westpac board since 2013.

The association will however stop short of calling for a spill meeting as Ms Limmer said she was satisfied enough of the bank's top brass will have been cleared out.

"We do believe they need some stability in the organisation," she said.

Nerida Caesar, Steven Harker and Margaret Seal are also up for re-election to the board.