POWERED BY MOMENTUM MEDIA
Industry funds flex investor muscle on bank bonuses
The major industry superannuation funds who are members of the Australian Council of Superannuation Investors (ACSI) have used their voting power in delivering first strikes to the remuneration reports of both National Australia Bank and ANZ.
The industry funds are also considering whether the rules around bank executive remuneration should be changed to ensure the views of investors were implemented before bonuses were actually paid.
ACSI chief executive, Louise Davidson issued a statement today stating investors had sent a strong message to the boards of the two banks which had joined Westpac in receiving first strikes against their remuneration reports.
She noted that investors in NAB had registered the highest-ever vote against a remuneration report, with more than 88 per cent of shareholders voting to oppose the report.
“The unprecedented size of the vote against the NAB remuneration report reflects the fact that investors take issue with the payment of executive bonuses in a year when the Royal Commission highlighted systemic breaches of the law and mistreatment of customers within the banks,” she said.
Davidson said ACSI had been expressing concern for some time about the NAB’s new incentive structure and welcomed the decision announced by the Chair Ken Henry to rethink the scheme.
“However, it was the decision of the board to award such significant bonuses to the executive team that led to such a strong vote against the report,” she said. “Reducing short-term bonuses, rather than zeroing them, was a hollow gesture and failed to meet investor and community expectations about accountability.”
Davidson noted that ACSI supported the ‘two-strikes’ rule on remuneration but noted that it placed shareholders in a position of only being able to express a view on bonuses that had already been paid.
“Perhaps the time has come to consider whether shareholders should have a greater opportunity to prevent outcomes like this, through the introduction of a binding vote on pay. For example, companies in the UK must give shareholders a binding vote on pay policy, and may not make any payments that are outside of that policy.”
Recommended for you
Super funds had a “tremendous month” in November, according to new data.
Australia faces a decade of deficits, with the sum of deficits over the next four years expected to overshoot forecasts by $21.8 billion.
APRA has raised an alarm about gaps in how superannuation trustees are managing the risks associated with unlisted assets, after releasing the findings of its latest review.
Compared to how funds were allocated to March this year, industry super funds have slightly decreased their allocation to infrastructure in the six months to September – dropping from 11 per cent to 10.6 per cent, according to the latest APRA data.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.73 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
30.15 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.71 3 y p.a(%)
