AAP Finance

Westpac’s Peter King secures CEO role

By AAP Newswire

Westpac has permanently appointed Peter King as chief executive on a $2.4 million salary with incentives.

Mr King had been chief financial officer prior to being chosen as acting chief executive in November, when former boss Brian Hartzer stepped aside amid the bank's money laundering and child exploitation scandal.

Along with his salary, Mr King is eligible for a long term bonus of $3.2 million.

He can also earn a short term bonus of up to $3.6 million. However management has decided not to accept short term bonuses this financial year due to the scandal.

The bank faces potentially billions in fines over claims it breached money laundering laws 23 million times and failed to properly monitor payments possibly linked to child sex offences in south-east Asia.

It is also grappling with the costly economic fallout from the coronavirus, along with its rivals.

Mr King's appointment comes a day after new chairman John Mcfarlane took the reins from Lindsay Maxsted, who had brought forward his retirement to March 31 during the AUSTRAC fallout.

Mr McFarlane said a chief executive was needed now, not later, and recommended the board appoint his colleague.

Mr King said he was focused on responding to the COVID-19 outbreak and supporting customers.

He expected Westpac would provide credit to many struggling customers this year.

His chief executive contract is for two years.

Mr King takes the role after 25 years at the bank. Mr King rose to the interim position after Mr Hartzer announced in November he would be stepping down and replaced on an interim basis. The former boss was given 12 months notice and will still get his $2.7 million salary, but is forfeiting up to $20 million in bonuses. Mr Maxsted also advised he would no longer seek re-election at the December AGM and would retire in the first half of 2020. Westpac shut down its international transfer platform LitePay and commissioned an independent review following the scandal, but the bank still copped an historic second strike against executive pay. Its share price has plunged since the scandal and coronavirus outbreak. Shares were trading at $29.05 on October 25, but had fallen to $15.96 at 1022 AEDT on Thursday.