AMP leaves door open for potential change at the top

AMP has shot down speculation of chief executive Francesco De Ferrari resigning immediately, but left the door open for a potential leadership spill.

A report in the Australian Financial Review on Thursday claimed Mr De Ferrari would resign by the end of the day. AMP then requested a trading halt before telling the market Mr De Ferrari remained chief executive. However, the company did not respond to questions about how long he would stay in that role.

On Friday, AMP released another statement conceding the group was negotiating the leadership of the company, which would be determined following the conclusion of a portfolio review.

AMP has shot down speculation its CEO is resigning immediately. Credit: Louie Douvis

“AMP confirms there has been no change to the CEO’s position and that Mr De Ferrari has not resigned,” AMP said.

“The board and Mr De Ferrari are working together and constructively discussing the future strategy and leadership of the group, post the completion of AMP’s portfolio review. These discussions are ongoing and AMP will provide updates as required.”

AMP launched the portfolio review last September after it claimed to have received unsolicited offers from third parties interested in buying the group’s assets. In February, US investment firm Ares signed a non-binding agreement to splinter AMP Capital and buy 60 per cent of its private markets business.

That deal included a 30-day exclusivity period, which ends this Sunday. If a binding agreement between the two parties is established, the portfolio review will be concluded meaning there could be a leadership spill.

AMP’s annual report, released this month, included remarks supportive of Mr De Ferrari’s leadership and his commitment to improving the group’s culture. “The board stands firm with our CEO, Francesco De Ferrari, in his continued prioritisation of this important work,” it said.

Mr De Ferrari also gave no indication in his annual statement that he could be exploring work opportunities elsewhere. “While COVID-19 will continue to shape our business in different ways throughout 2021, I look forward to working with our people to grow our iconic business and remain optimistic on the outlook for AMP in 2021,” he said.

One finance veteran, who declined to be named, said AMP Capital had been wrongly labelled the group’s “crown jewel” as its assets did not provide competitive returns and management was dysfunctional. Another senior source working in infrastructure investment, who also spoke on the condition of anonymity, said AMP Capital had not sealed many deals over the past year.

Ares offered to acquire 100 per cent of AMP’s shares in October, which include taking the group off the stock exchange. That deal ultimately fell apart, but sources familiar with the bid said Mr De Ferrari did not want to cede control of AMP’s ownership, instead preferring to forge on with his simplification strategy.

Investors, analysts and even AMP’s own staff said they were blindsided by the AFR’s report, that also claimed AMP Australia chief executive Scott Hartley would be appointed interim chief executive until a permanent replacement for Mr De Ferrari was found.

Deloitte partner Russell Mason, who had met with Mr Hartley recently, said “Scott, in my eyes, is a very good operator. I’ve got a lot of respect for him.”

Mr Mason said he hoped any changes to the leadership structure would assist in “turning things around” for AMP.

“We need AMP to be a competitive participant in the financial services market. I never like seeing such a big, established player like that disappear or fall to pieces. It’s not in anybody’s long-term interest.“

Trading resumed on Friday and AMP’s shares closed 0.75 per cent higher at $1.34 per share.

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