NAB escapes first strike over pay

National Australia Bank appears to have escaped a first strike over its executive pay report, while finance director Mark Joiner has survived a protest vote against his board re-election.

About 17 per cent of proxy votes cast at the bank's annual general meeting on Thursday were against the 2012 remuneration report, falling short of the 25 per cent needed for a first strike.

A total of 858 million proxy votes were cast in favour of the report and 185 million against.

NAB's chief executive Cameron Clyne's pay rose to $8.8 million last financial year and included almost $4 million worth of bonuses, despite the bank's net profit falling 22 per cent.

The bank's financial woes were largely caused by losses from NAB's troubled UK banking businesses.

Chairman Michael Chaney, who was overwhelmingly re-elected as NAB chairman, tried to reassure shareholders about the bank's executive pay, saying short-term bonuses had been lowered on account of the bank's recent performance.

"We adjusted the formula for short-term incentives downwards this year because we thought the result was disappointing," he said.

Shareholders also approved the re-election of finance director Mark Joiner to the board, with 855 million proxy votes in favour and 194 million against.

Some investors had been concerned about how Mr Joiner was the only banking chief financial officer in Australia to sit on a bank board.

But Mr Joiner told shareholders that while he had a "small number of external appointments" outside of his work at NAB, those extra duties took up almost none of his time.

NAB executives faced a barrage of questions and criticism over the bank's UK writedowns and general underperformance in comparison to its Australian banking peers.

"The board feels the same disappointment in terms of shareholder returns," Dr Chaney said.

Australian Shareholders Association spokesman John Campbell said investors were disappointed with NAB's performance, which was worse the other three major banks.

"The reward (performance rights) does not sit well with the results, which has frankly been disappointing," Mr Campbell said.

In October, NAB reported its net profit for the year to September 30 fell to $4.08 billion from $5.22 billion in the previous year.

The result included almost $1 billion in bad debt, restructure and impairment costs in the UK.

Meanwhile, Dr Chaney has called on the government to consider a raft of reforms, including to the tax and industrial systems, to help boost productivity and economic growth.

Dr Chaney said that as the resources investment boom peaks and Australia's terms of trade declines, the nation will need to increase productivity to achieve acceptable economic growth.

He said the global financial crisis had shown how banks' funding can be threatened, and resolving issues surrounding the current model could help avoid constraints on Australia's economic growth.

Chief executive Cameron Clyne said 2013 would be another challenging year for the bank.

"We have good momentum in our core Australian and New Zealand businesses and the right cost disciplines for these more difficult times," he said.

Market Data

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    AUDEUR=X
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