The big four bank has said it will defend against legal action from former chief executive Shayne Elliott, who was recently stripped of $13.5 million in bonuses.
ANZ noted on 12 December that its former CEO Shayne Elliott had commenced legal action in the NSW Supreme Court regarding remuneration outcomes for the 2025 financial year.
Elliott, who left the bank in May after a nearly decade-long tenure and was succeeded by former HSBC executive Nuno Matos, said he and ANZ had an agreement on the terms of his departure. He claimed this agreement was breached when the board, led by Paul O’Sullivan, cancelled his multi-million-dollar bonus last month.
In response to Elliott’s legal action against his former employer, O’Sullivan stated that the bank intends to vigorously defend the lawsuit.
“The board has been very considered and very deliberate in its assessment of remuneration outcomes. We are confident in our position and we will defend this matter vigorously.”
Under the Australian Prudential Regulation Authority’s (APRA) Prudential Standard CPS 511, ANZ said it must design executive pay to encourage prudent risk management, tie remuneration to performance and risk outcomes, and consider these factors when deciding each year whether to release unvested equity.
“In assessing remuneration outcomes this year, the board determined that no Australian-based group executive would receive short-term variable remuneration, excluding those in acting roles,” the bank elaborated.
“It also resolved that some of the long-term variable remuneration due to vest to Mr Elliott would be adjusted downwards to zero for 2025 and 2026.”
According to Institutional Shareholder Services and CGI Glass Lewis, nearly $8 million in long-term incentives remain available to Elliott, and both firms have urged shareholders to vote against ANZ’s pay report at next week’s meeting.
The move follows ANZ’s agreement to pay $240 million to the Australian Securities and Investments Commission (ASIC) after the regulator alleged multiple failings by the bank during Elliott’s tenure as CEO.
These failings included incorrectly reporting bond trading data to the federal government, along with widespread misconduct in its retail division which affected tens of thousands of customers.
At the time, ASIC chair Joe Longo said ANZ had betrayed the trust of Australians “time and time again”.
“The total penalties across these matters are the largest announced by ASIC against one entity and reflect the seriousness and number of breaches of law, the vulnerable position that ANZ put its customers in and the repeated failures to rectify crucial issues,” Longo said.
The bank could also be back in court next week as the ASIC fine saga drags on, with Justice Jonathan Beach questioning whether the penalty was too small given the scale of the failures, though his decision has not yet been reached.
