The board of Commonwealth Bank of Australia decided to scrap short-term bonuses for its CEO Ian Narev and other group executives for the fiscal year ended June 30 amid the money laundering violations the bank is facing.
The bank also decided to reduce nonexecutive director fees by 20% in the current fiscal year ending June 30, 2018, according to an Aug. 8 statement from the bank's chairman, Catherine Livingstone.
The moves come after the Australian Transaction Reports and Analysis Centre, or AUSTRAC, filed a civil lawsuit against the lender on Aug. 3 for alleged violation of money laundering and counterterrorism financing laws.
In determining outcomes for remuneration for fiscal 2017, the board of Commonwealth Bank of Australia considered risk and reputation matters that are impacting the group, as well as recognized the heightened public interest in executive remuneration given the AUSTRAC lawsuit, Livingstone said in the statement.
AUSTRAC alleged that Commonwealth Bank of Australia made more than 53,700 contraventions of the law, particularly regarding its use of intelligent deposit machines. The lender said that a software coding error was responsible for most of the anti-money laundering law violations it was accused of.