UPDATE 1-Australia's NAB readies for protest vote against exec pay

(Adds background on executive pay votes by CBA, Westpac, changes slug from NAB-AGM/)

Dec 19 (Reuters) - National Australia Bank Ltd’s chairman said that more than 80 percent of shareholders will vote against its executive pay proposal on Wednesday, as the lender faces a backlash after a year of damaging misconduct revelations that have rocked the sector.

Addressing disgruntled shareholders at the annual general meeting of Australia’s fourth-largest lender, Chairman Ken Henry said “the board is hearing loud and clear that our new scheme is not right.”

The protest vote follows a similar move by Westpac Banking Corp shareholders last week to reject its executive remuneration report, which was opposed by owners of nearly two-thirds of the company’s shares.

Earlier in December, Australia’s largest pension fund, AustralianSuper, said it will vote against the executive pay of three of the country’s biggest banks.

Under Australian corporate rules, if more than a quarter of shareholders vote against a pay proposal for two years running, they can call for the board to be removed.

Although larger rival Commonwealth Bank of Australia received a first “strike” in 2016, it escaped a second “strike” as it held its AGM in September.

Billions of dollars have been wiped off the value of Australia’s big banks this year as a public inquiry into the financial sector exposed a greed-driven culture in which staff were incentivised to mislead customers.

On Monday, NAB confirmed that its chief executive officer, Andrew Thorburn, will take about two months’ leave after its AGM, around the scheduled release of a major report from the Royal Commission inquiry which is due by Feb. 1, 2019. (Reporting by Nikhil Kurian Nainan in Bengaluru Editing by Phil Berlowitz and Matthew Lewis)