CBA has revamped its pay regime, giving the board greater discretion over bonuses in a way it says will lead to greater alignment between shareholders and executives’ interests.

Citi said NAB, ANZ and Westpac were in a “holding pattern” for executive pay this year, but there were likely to be bigger changes in 2022, when banks would incorporate new requirements from the regulator.

More sustainable financing is likely to remain a key issue for investors.

Citi analysts

Climate change is set to be one of the key issues on the agenda at next week’s Westpac, NAB and ANZ annual meetings, after activist group Market Forces lodged shareholder resolutions with all three banks. The resolutions would force the banks to disclose how they propose to meet “net zero” commitments by 2050.

Proxy adviser Institutional Shareholder Services is recommending shareholders vote in favour of the remuneration reports for all three banks, and against the climate resolutions. Market Forces’ resolution received support from 14 per cent of shareholders at CBA’s AGM in October.

ISS went against Westpac’s board on one item, however, recommending shareholders oppose the re-election of director Nerida Caesar, citing her membership of the board during a period of corporate governance and risk failures.

ISS noted Ms Caesar, who was appointed to the board in 2017, had a 24.9 per cent protest vote against her re-election at the bank’s fiery 2019 AGM following a money laundering crisis. Rival proxy firm CGI Glass Lewis is supporting Ms Caesar’s re-election.

In a further sign of the pressure on banks to meet community expectations, an independent review of the banking industry’s code of practice on Friday recommended a range of changes aimed at extending protections for consumers, and improving lenders’ compliance. The review of its code, by former senior Treasury official Mike Callaghan, was the first such review since the 2018 Hayne royal commission.

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