Westpac Banking Corp (ASX: WBC) saw its share price fall over 1% after the major ASX bank held its annual general meeting (AGM).
AGMs give investors the chance to ask questions, voice concerns and vote on remuneration & board members.
There has been a lot for Westpac shareholders to be unhappy about. Not only have they suffered because of the royal commission, lower profit and a dividend cut, but the AUSTRAC scandal has deeply hurt the reputation of the bank and it's likely to result in a large fine.
Westpac and the board received a number of critical questions and comments regarding AUSTRAC. Environmental issues were also brought up a few times according to reporting by the Australian Financial Review. At one point the fact that Westpac had cancelled staff Christmas parties because of AUSTRAC was brought up by a questioner, Westpac leadership decided to re-instate the parties for branch staff.
Ex-CEO Brian Hartzer had to fall on his sword, but it seems as though acting-CEO Peter King could be around for a while to make the difficult decisions and sweep up the mess before a new CEO comes in, or he gets the job permanently.
The Westpac board were also asked whether they had read the Hayne royal commission in full, but ex KPMG partner and ANZ chief financial officer Peter Marriott hadn't. Mr Marriott was involved with both the risk committee and the audit committee, not a good look with what happened with AUSTRAC. Perhaps unsurprisingly, he received a 41% protest vote.
Nerida Caesar received a 25% protest vote. The other directors were voted in with a 96% approval or higher.
However, the remuneration report suffered a 35.27% protest vote, exceeding the 25% threshold and meant there was a second strike when added to last year's strike. But then only 8.66% of votes voted in favour of holding an extraordinary general meeting to spill the board.
Foolish takeaway
The Westpac share price is at a real low point right now. It could be priced nicely for a short-term bargain hunter, but I don't think going for 'cheap' is necessarily the right thing to do. The net interest margin (NIM) is shrinking and we don't know how big the fine will be – the medium-term future doesn't look great.
