Westpac chairman John McFarlane has announced that the Westpac board and CEO Peter King have agreed to amend Mr King’s employment contract, moving from a two-year term to a 12-month notice period.
The big four bank announced the appointment of Mr King as group chief executive officer in April to permanently replace former CEO Brian Hartzer.
Mr King, who was interim CEO, assumed the role on a permanent basis and agreed to serve as CEO for the next two years to provide Westpac with managerial stability as it deals with the economic ramifications of the COVID-19 crisis.
Mr McFarlane has now said that the board and Mr King have had recent discussions, following which Mr King confirmed that he is committed to the multiyear plan to turn the bank around.
Reflecting these discussions, his employment contract has been amended to the standard 12-month notice period.
Mr King’s contract terms remain unchanged, except for the removal of the two-year term.
Speaking of his extended contract, Mr King said: “It is a privilege to lead Westpac. While I am pleased with what we have achieved over the last six months, we have a significant agenda ahead that requires a longer-term commitment than two years. I am determined to see Westpac return to a leadership position.”
Commenting on the extension of Mr King’s contract, Mr McFarlane said: “In the short time Peter has been CEO, he has made a significant contribution to Westpac, in a year of unprecedented change. He has guided Westpac through the challenges of COVID-19 as well as settling the AUSTRAC matter.”
Last year, the Australian Transaction Reports and Analysis Centre (AUSTRAC) had applied for civil penalty orders against Westpac after alleging that the major bank contravened Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) on more than 23 million occasions.
The Federal Court recently ordered Westpac to pay an agreed $1.3-billion penalty for breaching the laws, the largest civil penalty in history.
Speaking of Mr King’s handling of the matter, Mr McFarlane said: “His strategy reset is already driving fundamental change to how the company operates with clearer accountability, faster decision making and a focus on improving risk management. He has also refreshed the executive team and refocused the bank on its core markets and products.
“Given the program of work underway, we are delighted to have leadership continuity,” Mr McFarlane said.
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Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.
Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.