The Commonwealth Bank of Australia (ASX: CBA) held its AGM while it's staring down the barrel of fines potentially worth hundreds of millions of dollars.
It's being investigated by the Australian Securities & Investments Commission, ASIC, and faces a class action from shareholders as well as civil penalty proceedings initiated by AUSTRAC, in the Federal Court.
In the United Stated, CBA looks like it's exposed to many more millions of dollars of possible fines as warnings loom that investigations into the bank, which has a New York presence, are inevitable.
This means CBA could soon be answering to the American financial intelligence unit, FinCEN, as well as the Securities and Exchange Commission, SEC, and other federal New York and federal regulatory bodies.
There's more we can add to that list of unfortunate circumstances the bank has found itself in, but that will do.
Yet, somehow, the CBA's board and executives still managed to keep their hefty pay packets despite concerns raised by shareholders.
"Most of your executives … are on A$1 million plus," said Rodney Jeffrey, one of dozens of shareholders who addressed the meeting, according to Reuters.
"Why should there be an incentive system at all? Aren't people committed to a company on that salary?" he asked as cheers of support emerged from like-minded investors.
The executives whose pay packets exceeded $1 million and have led the CBA through a troubling year of scandals include David Cohen, David Craig, Kelly Bayer Rosmarin, Rob Jesudason, and Matt Comyn, to list a few of the banks highest paid head honchos.
Although the executives received some cuts to their pay, it appears that not all the bank's shareholders were that impressed.
And why should they be?
If the bank's executives were politicians in Australia's parliament they would likely be forced to stand down amid the slightest hint of any such allegation that suggested a possible link to their organisation's involvement in money laundering or terrorist activities.
But politicians are held to higher standards than bankers and it must not forgotten that allegations too often carry the stink of convictions despite Australia operating under an adversarial legal system.
And the bank is yet to have its day in court.
Ms Livingstone told shareholders that the board views the allegations and legal proceedings as "very serious" and the board is "treating them with the gravity they warrant", part of which has involved the formation of a special committee to deal with AUSTRAC's allegations.
"If, as part of its work, the Committee finds that further action on accountability is required for parts of the organisation, or individuals, that will also be addressed as a priority, and we will be transparent regarding those outcomes," she said.
Still, despite the mud, chairwoman Catherine Livingstone was able to boast of the bank's "many excellent achievements".
Ms Livingstone noted that the bank's FY 2017 financial performance was "very sound", with cash profit up more than 4% to $9.9 billion, with a return on equity of about 16%.
She also noted stronger capital and funding which allowed the bank to increase its dividend by 9 cents to $4.29 per share, and return a total of $7.4 billion to shareholders.
But that was the bank's past performance and its future remains uncertain.
It seems the CBA is yet to determine who its next CEO will be with Ian Narev set to leave in a matter of months.
And while the CBA is not the only big bank to face serious questions concerning its activities, with the National Australia Bank Ltd (ASX: NAB), the Australia & New Zealand Banking Group (ASX: ANZ) and Westpac Banking Corp (ASX: WBC) completing the quartet of naughty banks, it's in a bit more trouble than its rivals.
It is possible that CBA promoted a culture of questionable activities in the pursuit of profits and it seems it will be a while before the stains are washed clean.
All this means I would be reluctant to invest in the bank, or any other bank, particularly with so many better options out there.
