'As CEO I accept that I am ultimately accountable for everything that happens at the Bank. And it is clear that we have fallen well short of what the community expects of us and we expect of ourselves.'
Adding to this, it was pointed out that:
'Mr Hartzer has been given 12 months notice and will be paid his fixed remuneration of $2.686m over this period.'
Not a bad outcome considering the circumstances and at the very least Mr Hartzer will be forgoing his 'FY19 'Short-Term Variable Reward.'
Of course, given the magnitude of the alleged breaches – some 23 million of Australia's Anti-Money Laundering and Counter-Terrorism Financing Act – it always seemed a matter of when there was going to be a radical upper-management shakeup – not if.
Peter King, Westpac's current Chief Financial Officer, will assume the top CEO spot in an acting capacity, in the interim.
In step with this, Westpac's current Chief Operating Officer – Gary Thursby – will assume the role of acting Chief Financial Officer.
Practise trading Australian banks stocks with an IG demo account now
Board disruptions and a continued discussion
Besides this C-suite shakeup, Mr Maxstead announced that he would bring his previously planned retirement as Chairman from the Westpac (ASX: WBC) Board forward to H1 FY20.
Speaking of these broad changes, Mr Maxsted said:
'As was appropriate, we sought feedback from all our stakeholders including shareholders and having done so it became clear that board and management changes were in the best interest of the Bank.'
Other directors, such as Ewen Crouch, noted that they would not seek re-election at Westpac's upcoming AGM.
Westpac share price: the potential implications
With all this instability, it is unsurprising that some brokers have turned further bearish on the bank.
On a conservative estimate, Bell Potter for example suggests that Westpac could be fined as much as $3.7bn – or $161 per offence of the AML/CTF Act.
With this fine in focus, the broker also believes that Westpac's dividend – which was also slashed during the bank's FY19 results – could come under further pressure. Specifically, the broker expects it to be cut to $1.50 per share in the years ahead.
As a result of this Westpac (ASX: WBC), may also be required to pursue another capital raise, says the broker.
In saying that, legal storm clouds are already beginning to form around the bank over the $2bn cap raise it completed just a few weeks ago.
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