Barry Jackson, chair, Qudos Bank
In a rare rebuke for the board of a mutual bank, members of Qudos Bank have voted down a proposed hike in fees for the seven-member board.
The board of Qudos proposed a material increase in directors’ fees at the recent AGM, arguing that fees had been unchanged since 2016.
On the other hand Qudos now has a comparatively lean board. As recently as July, the bank had nine directors (with the rules, then, allowing for up to 12).
In the 2022 annual report, Qudos explained the proposed fees were “at the midpoint of comparable organisations”.
Responding through an external public relations agency, Qudos told Banking Day: “We are disappointed with the result of the resolution, which was close with 53.5 per cent against and 46.5 per cent supporting it.
“We are trying to better understand the reasons for the outcome of the vote as there were no questions or comments raised at the AGM itself and very few comments or questions raised during the voting period.
“We acknowledge that it is a tough time to be asking for a sizeable adjustment to remuneration, but the directors have not had any form of adjustment to their remuneration for six years and they are paid in the bottom 25 per cent of the organisations we benchmark against.
“Qudos Bank will be working to engage with its members to ensure a fair outcome for our directors who underpin the good governance of the bank.
“We do not believe that anything concerning disruptions at Qantas Airways played any part in this result. Qantas employees now make up around 12 to 13 per cent of our customer base.”
Formerly the Qantas Staff Credit Union, Qudos Bank adopted its current name and status 10 years ago.
One differentiator on the governance side at Qudos is board renewal, with five of the seven directors appointed in the last three years. Barry Jackson, the chair, has served the longest; since 2015.
The bank is reasonably efficient (by sector standards) with a cost to income ratio of 71 per cent and in the middle of the range on profitability measures, with a return on assets of 0.33 per cent and a return on equity of 4.9 per cent over FY2022.
With A$5.2 billion in assets, Qudos Bank is the tenth-largest mutual ADI in Australia, and broadly tracking peers on asset and deposit growth.
But the bank’s annual report hints at deeper strategic challenges for the lowly paid board.
Qudos had 89,900 members at June 2022, a decline of 10 per cent over the last 12 months.
So maybe all the turbulence in the Qantas business over three years of Covid is material after all for the bank.