Shareholders slug Bank of Queensland with first strike

Bank of Queensland is the latest company to get a first strike to its remuneration report.

Shareholder fury has boiled over at the Bank of Queensland, delivering a first strike to board pay after a year of disappointing earnings results and regulator sanctions.

Less than 60 per cent of shareholders voted for the regional lender’s remuneration report at its annual general meeting on Tuesday, well short of the 75 per cent required to pass.

BoQ is the latest in a string of companies – including Qantas, Woolworths, Whitehaven Coal, Magellan Financial, Tabcorp, Fortescue and Harvey Norman – to suffer a first strike this AGM season, and could face a board spill motion if a second strike is recorded next year.

The bank’s net profit after tax collapsed by 70 per cent to $124 million in the last financial year, impacted by a $200 million goodwill impairment and integration, remedial and restructuring costs.

The board also experienced significant leadership turmoil, with chairman Patrick Allaway stepping in as chief executive after his predecessor George Frazis was unceremoniously sacked in November 2022.

‘”We recognise this has been a difficult year, with our leadership changes, enforceable undertakings, decline in statutory earnings and poor share price performance,” Mr Allaway told shareholders in Brisbane.

BoQ was required to add $50 million to its operational risk capital requirement in May after financial regulators APRA and AUSTRAC found deficiencies in its anti-money-laundering and counter-terrorism financing program.

More than 36 per cent of shareholders voted against the re-election of director Bruce Carter, chair of the company’s risk committee.

The Australian Shareholders Association advised against Mr Carter’s re-election ahead of the meeting, citing workload concerns and to “hold the board to account” for gaps in its risk culture.

Mr Allaway maintained the bank remained well-positioned for future success, despite an uncertain economic environment and mounting margin pressures.

“While the Australian economy remains resilient, we do anticipate increasing economic risk into next year due to the lagged impact of sustained higher interest rates combined with the increased cost of living,” he said.

Mr Allaway forecast lower returns in the current financial year, with a return to profitability growth in the 2025 financial year, when the cycle turns.

“We will continue to target the payment of dividends at the lower end of our payout ratio during this period,”  he said.