Westpac lashed by angry investors
DISGRUNTLED shareholders hit Westpac with a first strike against its remuneration report at a tense annual general meeting.
Shareholders expressed their frustration over the bank’s poor performance, tumbling share price and ongoing financing of fossil fuel projects. Just over 29 per cent of proxy votes went against the remuneration report, well in excess of the 25 per cent needed for a first strike.
If shareholders vote down a company’s remuneration package two years in a row, the board may be voted out of office.
The first strike came after a 20 per cent tumble in Westpac’s share price in recent weeks following a disappointing full-year result.
In addressing the protest vote, Westpac chairman John McFarlane admitted he shared shareholder concerns about the lender’s performance.
“I’m concerned about underlying performance, and I know shareholders are concerned about it,” he said.
The Australian Shareholders Association voted proxies against the bank’s remuneration report, with CEO Rachel Waterhouse saying it was “one clear way for shareholders to express their continued dissatisfaction with Westpac’s performance”.
Mr McFarlane, who was appointed chairman a little under two years ago, also defended the lender’s financing of fossil fuel projects, saying the bank was “doing the right thing” in finding a middle ground with its funding policy, as he and chief executive Peter King faced a grilling from angry shareholders.
Addressing an avalanche of questions over its commitment to net zero amid continued financing of thermal coal and oil and gas projects, Mr McFarlane said an abrupt end to fossil fuel financing was not the right call for Australia.
“We’re trying to find the best position here and I think we’ve done reasonably well,” he said. “Nearly 80 per cent of our lending is to renewables and not to fossil fuels. In finding that middle ground, in all honesty, I think we’re doing a pretty good job, and we’re doing a better job than some of our competitors.”
The move by European banks to completely exit fossil fuel financing would not translate across to the local market, he warned.
“The country needs us to finance various parts of sectors, including electricity generation,” he said. “We’ve taken the view that we want to reduce our exposure to fossil fuels, and we’re coming out of coal (by 2030) but we want to honour our obligations to the industries and the customers we serve.”
Earlier in the meeting Mr King warned that low interest rates and intense competition would continue to impact sector margins. He sought to reassure shareholders, saying changes implemented over the past 18 months had made the bank “simpler and stronger”. “The company we are building is profoundly different to the Westpac of two years ago – and it needs to be,” Mr King said.
Mr Macfarlane said the fullyear result, which saw Westpac post lower-than-expected cash earnings on intensifying margin pressures, was disappointing. “Be assured, remedial action has been instituted ... to improve performance,” he said. Westpac shares closed 6c higher at $20.99.