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BoQ faces shareholder revolt over executive pay amid profit plunge

EditorAmbhini Aishwarya
Published 05/12/2023, 03:50 pm
Updated 05/12/2023, 03:50 pm
© Reuters.

BRISBANE - At the Bank of Queensland's (BoQ) Annual General Meeting (AGM) today, shareholders expressed significant discontent with executive compensation, delivering what is known as a "first strike" against the bank's remuneration report. The report received less than three-fifths support following a sharp 70% decrease in net profit, which fell to AU$124 million, primarily due to a substantial goodwill write-down.

The AGM took place against a backdrop of recent upheaval within the bank's leadership and financial performance. BoQ has been grappling with a severe profit downturn, which was compounded by swift executive changes. This includes the sudden departure of George Frazis as CEO, who was recently approved for substantial financial incentives.

Patrick Allaway, who has taken on the role of chairman-turned-CEO in the wake of these changes, addressed shareholders at the Brisbane gathering. He acknowledged the past year's adversities, which included leadership turnover, regulatory enforceable undertakings, an earnings slump, and a decline in share value following Frazis's ousting. In addition to these challenges, the bank has faced regulatory penalties that necessitated an additional AU$50 million (USD1 = AUD1.5198) in risk capital to address anti-money laundering shortcomings.

Shareholders also voiced their opposition to Bruce Carter's (NYSE:CRI) re-election to the board. Over one-third cast dissenting votes due to concerns over risk management. This resistance from advisory firms Glass Lewis and ISS comes amid regulatory demands for an audit and additional capital provisions.

Despite the current economic headwinds and margin compression, Allaway emphasized Australia's economic resilience. He projected conservative dividend payments that would stay within payout ratio limits and forecasted a return to profitability by FY2025 after anticipating a tough fiscal year ahead.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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