ANZ Bank looking to avoid 'second strike' over executive pay as shareholders prepare to vote

Former ANZ Bank boss David Hisco at his holiday home in Omaha Beach. Photo / Dean Purcell

ANZ Banking Group is looking to avoid a "second strike" over executive pay as its board faces shareholders at their annual meeting in Brisbane today.

Having previously made changes to remuneration plans, including slashing or deferring executive bonuses, ANZ has reportedly won over proxy advisory firms ISS and CGI Lewis and large super funds, leaving retail shareholders as the final hurdle.

The proxy advisors have also recommended shareholders vote in favour of all directors up for re-election, the Sydney Morning Herald reported.

ANZ copped first strikes against executive pay last year as shareholders reacted to the failings exposed by lenders in the banking royal commission with a 34 per cent vote against the remuneration report.

However, ANZ had since shown "evidence of restraint" in its executive remuneration, as well as a 20 per cent cut to director fees, ISS noted.

Today's AGM follows more turmoil at rival Westpac, which became the first of the big four to receive a second strike at its AGM as retail shareholders vented fury over allegations of 23 million breaches of anti-money laundering laws by the bank.

ANZ may not be completely out of the woods given another tumultuous year.

Former ANZ New Zealand boss David Hisco resigned in June over an expenses scandal.

As a result he forfeited A$7.4m in variable remuneration payments.

But he was still paid out a termination benefit worth A$2.1m, based on accrued annual leave, long service leave and pay in lieu of notice, as well as a salary of $1.7m.

Hisco left his job in mid-June following allegations he "mis-characterised" certain personal expenses as business expenses, including wine storage and the use of chauffeur-driven cars.

The Hisco scandal worsened after it was revealed the bank had sold a luxury property to Hisco's wife for what appeared to be a below value price.

The Reserve Bank ordered ANZ to undertake two Section 95 reports and the findings of the first report were released last week, saying improvements in the bank's director attestation process were needed.

The Deloitte report said there was an element of complacency in the way ANZ's directors signed off requirements for the bank and its operation was piecemeal.

But it also found ANZ did not breach its policies when it came to the controversial sale of the St Heliers property to Hisco's wife.

Strategic Pay chief executive John McGill told the Herald the Hisco expenses scandal was an "appalling lapse in management of the CEO by the board".

There was a lot less tolerance for poor governance now, McGill added.