Chair acknowledges shareholders are “very disapointed about where AMP is today”
AMP has endured a contentious annual meeting in which shareholders questioned the board’s competence, only avoiding a second strike against executive pay by a narrow margin.
Almost 24% of shareholders voted against AMP’s remuneration report – just under the 25% needed for the second strike that would trigger a vote to sack the board, according to a report by The Sydney Morning Herald.
Last year, more than 67% of shareholders voted against the company’s remuneration report, and AMP was preparing for a second strike after proxy firm ISS’s “against” vote recommendation.
ISS said that while AMP had approved its approach to remuneration by cutting the chair’s annual salary by $190,000 and freezing bonuses through FY20, its board fees were still above average and retention payments were unjustified, the Herald reported.
Shareholders grilled AMP’s board for more than two hours, and the company’s share price fell more than 2% to $1.11 in afternoon trading – just a little above its historic low of $1.08 last March.
Shareholders interrogated the board about AMP’s high staff turnover, reputational damage, the destruction of share value, leadership instability and the future sustainability of the company.
“How can we feel confident the board has the skills to hold the ship together?” one shareholder asked.
AMP endured a battering 2020 thanks to the financial impacts of COVID-19 and its own decision to promote Boe Pahari, an executive who had been fined for sexually harassing a female employee. The investor outcry led to the ouster of board chair David Murray and cost the company billions in investor redemptions and lost corporate mandates.
Pahari will soon leave the company, but could be paid up to $70 million in performance bonuses, the Herald reported.
AMP also put parts of the business up for sale last year, but only one potential buyer – US private equity firm Ares – came forward. The deal with Ares ultimately collapsed after six months of negotiations.
AMP chair Debra Hazelton, who took the reins in August after Murray resigned, acknowledged that shareholders were “very disappointed about where AMP is today.”
However, she said that AMP’s “very complex transformation strategy” would lead to long-term growth and higher share process.
“Turning the business around requires time and effort,” Hazelton said.
Last week, AMP announced plans to spin off and separately list AMP Capital’s private markets business under new management and branding.