Commonwealth Bank shareholders have delivered a significant protest vote against the lender's executive pay and forced it to abandon revised conditions for chief executive Ian Narev's long-term bonsues.
Nearly 49 per cent of votes received at CBA's annual general meeting in Perth were cast against accepting the company's executive remuneration report, well above the 25 per cent that constitutes a so-called 'strike'.
A second strike at next year's AGM could prompt a spill of the bank's board.
"Based on direct proxies and votes received, we will receive a first strike on the remuneration report, and as I said earlier, we will of course discuss this with shareholders over the course of the next 12 months," chairman David Turner told shareholders.
Proxy advisors ISS and Ownership Matters had reportedly recommended their institutional clients reject the remuneration report because of inconsistencies between executive bonuses and scandals involving CBA's Wealth Management and CommInsure businesses.
Mr Narev's bonuses are also under the spotlight, with a resolution related to granting the CEO rights worth up to $4 million withdrawn from a vote before the meeting got underway.
The bank said proxy votes indicated the resolution would have been passed, but it said it removed the vote from the agenda in recognition of shareholder concerns about changes to the performance measures linked to incentives for Mr Narev, whose pay in the 2015/16 financial year totalled $12.3 million.
The Australian Shareholders' Association said the proposed new targets for the executive reward plan were increasingly subjective and discretionary rather than being measurable.
It also objected to the adjustment of the performance periods over which the hurdles were assessed, claiming they made it easier for executives to achieve the targets.
CBA said Mr Narev would still receive the reward rights, but they would be linked to performance measures approved by shareholders at the 2015 AGM - shareholder returns and customer satisfaction.
Mr Turner acknowledged trust in the bank had been questioned in recent times, and concerns over the bank's Wealth Management and CommInsure businesses had led to a considerable amount of scrutiny.
Mr Narev told shareholders that CBA was adapting to higher levels of scrutiny and community expectations.
"We have not always done as well as we should have, but we have learnt from these experiences, and we are now taking committed, long-term fundamental action," he said.
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