Angry AMP shareholders vote down remuneration report

AMP shareholders head into the AGM.

AMP shareholders head into the AGM. ABC

AMP has received the largest shareholder protest vote for a major company in Australian corporate history, amid the ongoing fallout from its disastrous appearances at the bank and financial services royal commission.

More than 61 per cent of votes were directed against the adoption of the company’s remuneration report.

While a largely symbolic or “advisory” vote, it is a measure of the extraordinary anger AMP has generated among its owners since the fee-for-no-service scandal erupted at the commission.

A second strike of more than 25 per cent voting against the remuneration report at next year’s AGM would trigger an automatic spill of all boardroom positions.

The previous highest protest vote for a Top 50 company was a 49 per cent rejection of CBA remuneration report in 2016, while QBE suffered a 45 per cent protest vote earlier this month.

Like many large institutional investors, the Australian Shareholders’ Association directed its proxies against adopting the executive pay structure, arguing AMP’s generous remuneration policies had been responsible for many of the issues raised at the commission.

“We are disappointed the numerous reviews [so far] announced don’t include the high levels of [executive] remuneration,” ASA company monitor John Whittington told the AMP board before the vote.

“The amount of pay was too great for the former CEO at nearly 48-time average weekly earnings … that is not aligned with shareholder or community interests.”

The one director facing re-election at the AGM, lawyer Andrew Harmos survived, but suffered a high protest vote of 37 per cent.

AMP’s interim executive chairman, Mike Wilkins, said the board acknowledged the concerns raised by shareholders and would work to address them as quickly as possible.

Unreserved apology to Australia

Earlier, Mr Wilkins issued an unreserved apology to AMP’s customers, shareholders and the entire community over the mounting fee-for-no-service scandal and allegations AMP misled its regulator, Australian Securities and Investments Commission.

Mr Wilkins told the company’s annual general meeting in Melbourne the issues highlighted at the bank and financial services royal commission were unacceptable.

“We let you down, we have let our customers down and we have let the wider community down,” Mr Wilkins said.

“We have heard loud and clear that you [shareholders] require change.

The board has accepted accountability, to date some 50 per cent of the board has left or is leaving. The scale of these changes reflects the gravity of the issue.”

Even before the AGM started investors demonstrated their level of anger at the company, with news two separate class actions had been launched.

Both cases are open to shareholders who bought AMP shares from May 2013 to mid-April 2018.

AMP’s value has tumbled about 25 per cent since the company first fronted the commission.

AMP’s most senior ranks have been gutted since the prospect of criminal charges for alleged breaches of both the corporations and ASIC acts were raised at the commission.

Chief executive Craig Meller’s retirement was brought forward, while chair Catherine Brenner and chief legal counsel Brian Salter were forced out over allegations they interfered with the writing of an independent report to ASIC.

Faced with a furious shareholder base and certain defeat at the AGM, two directors up for re-election – Holly Kramer and Vanessa Wallace – withdrew their nominations.

amp pm update

AMP has been rocked by the revelations at the Banking Royal Commission. Photo: AAP

A third board member facing re-election, Andrew Harmos, is facing a tough fight to retain his seat.

AMP longest-serving director Patty Akopiantz will also leave the board by the end of the year.

In all, five of the 11-strong board that fronted the AGM will now have to be replaced.

The ASA’s Mr Whittington told the remaining directors they should all consider leaving the board by Christmas in the interests of renewal.

Female representation wiped out

The boardroom blood-letting has also wiped out the entire representation of women on the board.

Mr Wilkins said he would work with incoming chair David Murray to reinvent AMP, the company’s governance practices and culture, as well as renew the board.

“Achieving the right balance of gender diversity and financial services experience will be critical,” he said.

“It is highly regrettable and unintentional that we have lost all our female directors through this process.”

“We have heard loud and clear that you [shareholders] require change,” Mr Wilkins said.


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