SYDNEY — Shareholders voted against the executive remuneration plans of two of Australia’s biggest banks on Wednesday following misconduct revelations that have swept through the country’s financial sector.
National Australia Bank shareholders delivered an unprecedented protest vote against the lender’s pay plans, with a record 88.1 percent opposing the executive bonuses presented to the annual general meeting in Melbourne.
Australia and New Zealand Banking Group shareholders also voted down ANZ’s executive bonus plans at a later meeting in Perth, with around 34 percent against, well above the 25 percent required to defeat the motion.
Under Australian corporate rules, if more than a quarter of shareholders vote against a pay proposal for two years running, they can call for the board to be removed. NAB and ANZ now join Westpac Banking Corp. with one strike apiece.
Australian banks have seen about A$67 billion ($48.2 billion) wiped from their market value since February when a quasi-judicial inquiry started public hearings into financial-sector wrongdoing.
The Royal Commission inquiry lifted the lid on widespread malpractice that put profits before customers, disregarded compliance obligations and encouraged misbehavior with conflicted bonuses and commissions.
The inquiry is expected to recommend tougher regulation of the financial sector when it hands its final report to the government in February, particularly around the use of bonuses and incentives.
“Investors today sent a strong message to the boards of NAB and ANZ that they expect much higher levels of accountability for the misdeeds exposed by the Royal Commission,” said Louise Davidson, the CEO of the Australian Council of Superannuation Investors (ACSI) which represents 39 large funds.
“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.”
‘FAILED CAPITALISTS’
The Big Four retail banks yielded close to 20 percent return on equity over the last decade, Refinitiv Eikon data shows. That has shrunk to 12 percent this year as earnings tumble, growth plans are abandoned and fee income is cut in the fallout of the inquiry.
Shareholder Chris Schott told the NAB meeting the bank’s board and its senior management were “failed capitalists, they have destroyed millions and millions of dollars of value. They can’t continue.” The comments were met by cheers in the room.
The 88.1 percent vote against NAB’s remuneration report is a record high for any listed Australian bank.
“This has been a challenging year,” NAB Chairman Ken Henry told the AGM.
“The board is hearing loud and clear that our new scheme is not right. We tried, but we got it wrong. We are listening to you. We will try again.”
He said Australia’s fourth-largest lender would change its pay structure next year, after taking into consideration investors’ concerns and the Royal Commission’s recommendations.
ANZ Chief Executive Officer Shayne Elliott told shareholders the bank “too often failed our customers.”
“We have acknowledged this and publicly apologized,” he said.
The remuneration plans of Commonwealth Bank of Australia, the biggest member of the country’s “Big Four” banks, were passed last month after it lowered executive bonuses and directors’ pay. — Reuters

LONDON — Uber has lost its latest court bid to stop its British drivers being classified as workers, entitling them to rights such as the minimum wage, in a decision which jeopardizes the taxi app’s business model.
Two drivers successfully argued at a tribunal in 2016 that the Silicon Valley firm exerted significant control over them to provide an on-demand service, and that they should cease to be considered as self-employed, which gives few protections in law.
SPONSORED
An employment appeal tribunal upheld that decision last year, prompting Uber to go to the Court of Appeal. On Wednesday, a majority of judges there said they agreed with the previous verdicts and rejected Uber’s arguments.
“They approve the reasoning of the Employment Tribunal, which relied on a number of features of Uber’s working arrangements as being inconsistent with the driver having a direct contractual relationship with the passenger,” the Court of Appeal said in a summary.
Uber said it would appeal the verdict, meaning the legal process will continue.
“This decision was not unanimous and does not reflect the reasons why the vast majority of drivers choose to use the Uber app,” said a spokeswoman.
“We have been granted permission to appeal to the Supreme Court and will do so.”
Uber, which could be valued at $120 billion in a flotation, has faced protests, regulatory crackdowns and license losses around the world as it challenges existing competitors and rapidly expands.
In Britain, the self-employed are entitled to only basic protections such as health and safety, but workers receive the minimum wage, paid holidays and rest breaks. Uber has introduced a number of benefits for drivers this year.
Unions argue that the gig economy — where people often work for various firms at the same time without fixed contracts — is exploitative, whilst Uber says its drivers enjoy the flexibility and on average earn much more than the minimum wage.
Uber says its practices have been widely used for decades in Britain by minicabs, private hire vehicles which cannot be hailed in the street like traditional black taxis.
The Independent Workers Union of Great Britain, which backed the two drivers in the case, attacked Uber for appealing court decisions which have gone against the firm.
“It is becoming increasingly ridiculous for so-called ‘gig economy’ companies to argue that the law is unclear when they lose virtually every tribunal and court case,” said General Secretary Jason Moyer-Lee. — Reuters