"For this year, in which there were ongoing investigations into CBAs life insurance business, known problems with anti-money laundering compliance, it was known that customers had been charged fees for no service, and it was known that consumer credit insurance had been miss-sold?" Orr asked.
Livingstone confirmed that figure was correct, to which Orr responded: "Do you agree that they were all things — that was the context for this recommendation by the chair of the board for Narev to receive a short-term variable award of A$2.862m? … Do you have any reflections on that recommendation, Livingstone?"
Livingstone admitted that payment was "inappropriate".
"As I've indicated, we have all reflected on these outcomes, and would regard them as inappropriate," she said.
The commission was also shown a 2016 report about remuneration for senior executives, in which by Narev argued those high up the CommBank chain should be paid their bonuses in full.
"I am not aware of any reasons why deferred (bonus pay) should not be paid in full to all relevant executives," Narev wrote in the report, recommending all executives be given the top rating of "fully met" for dealing with risk.
He argued none should have their "short term incentive" cut — and that they should all receive more than 100 per cent of their bonus.
However, it was just one blistering exchange out of many during Livingstone's questioning today, which has been variously described as a "trainwreck" and an "absolute disaster" on social media.
Earlier this morning, Livingstone repeatedly cleared her throat and appeared to stumble over her words under questioning by Orr over the bank's misconduct.
Livingstone also told the commission the bank's management did not have the capacity to handle its escalating anti-money laundering and counter-terrorism financing issues, and claimed she raised those problems during a board meeting in October 2016 in her former role as CBA director.
"I did not receive satisfactory answer to my challenge, because it did not accord with my understanding of AUSTRAC (Australian Transaction Reports and Analysis Centre)," she said.
"That response served to confirm the concern that I had been developing, based on my experience as a non-executive director, that management, at that time, did not have the capacity to respond to what was clearly an escalating, significant and serious systemic control challenge.
"Management did not have the capacity, either because they couldn't or they wouldn't."
The inquiry also heard that board meeting's minutes did not mention any challenge made by a director about the matter — although Livingstone insisted it did happen.
Orr then suggested CommBank may have failed to meet its statutory obligations under the Corporations Act by not keeping accurate, thorough minutes from its board meetings.
The hearing continues.
