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· Posted on
February 21, 2024

Thank you, next: Westpac cops strike one from shareholders over its new executive pay plan

Westpac have had a bit of a rough year...they've been defrauded, copped $1.3 billion in write-downs and forced to pay over $100 million in fines.

What's the key learning?

  • Westpac's Annual General Meeting (AGM) saw over 30% of shareholders vote against the bank's renumeration report
  • If 25% or more of shareholders veto a company's executive pay plan at its AGM, the company receives a strike
  • If it receives two strikes in two consecutive AGMs, shareholders can vote to spill the board.

Background: Westpac have had a bit of a rough year. They've been defrauded, copped $1.3 billion in write-downs, forced to pay over $100 million in fines...and now, shares are down around 20%.

What happened: Westpac shareholders are grumpier than Sex And The City fans after the new reboot (and that twist). So, when Westpac put its new executive pay plan to shareholders at the company's annual general meeting (AGM)...things didn't go to plan.

What else: Over 30% of shareholders voted against the bank's remuneration report in protest, slapping it with a first 'strike'. And in the business world, you only get two.

So what's the key learning?

💡At a public company's AGM, the company will share financial results, their strategy for the future...and they'll have a vote on executive remuneration (aka, how much the top dogs and cats get paid).

💡Where 25% or more of a company's shareholders vote against the remuneration plan, the company receives a strike ❌. And for many shareholders it's about dissatisfaction with the performance of the company and its management.

💡If executives receive two strikes in two consecutive AGMs, then the shareholders may choose to spill the board (aka vote to re-elect the board). So Westpac's shareholders are handing the company a big wake-up call.

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