AMP says three more directors to quit amid investor pressure

Three more directors have quit AMP’s board, bowing to investor demands for renewal at the embattled wealth manager.

Holly Kramer is quitting as an AMP director. Pic: James Horan

Three board directors at AMP have succumbed to intense investor pressure for renewal at the besieged wealth manager, announcing their resignation ahead of this week’s shareholder meeting.

AMP issued a short statement today announcing that directors Vanessa Wallace and Holly Kramer will step down ahead of Thursday’s annual general meeting, following shocking revelations at the royal commission into banking and financial services last month.

Ms Wallace will also leave her job as chairman of AMP Capital Holdings.

Meanwhile long-serving director Patty Akopiantz has also offered to step down and will serve until the of end 2018.

However a resolution to elect director Andrew Harmos will still be put to shareholders on Thursday.

Mr Harmos is digging in his heels despite calls from influential proxy advisers to block his board seat.

Turmoil at AMP has already claimed the scalps of chair Catherine Brenner and CEO Craig Meller.

“Our shareholders are demanding board accountability and need to know that meaningful change is underway,” interim executive chairman Mike Wilkins said.

“I’d like to thank Patty, Vanessa and Holly for their service to AMP. They are extremely capable directors who have all made valuable contributions and brought great diversity of thought and experience to the board.”

“They have listened to and acted on the feedback from our investors.”

At 11.25am (AEST), AMP shares were flat at $4.12 - down about 25 per cent in the past two months.

Vanessa Wallace with Simon McKeon at AMP’s 2016 annual meeting. Pic: David Geraghty

The resignations came after AMP’s pleas to investors not to vote out three directors fell on deaf ears, with one of the big proxy advisers reversing its previous support and recommending institutional clients vote against three directors facing election this week.

The Australian Council of Superannuation Investors, which represents 32 funds managing $647 billion, decided against changing its opposition to the director elections, despite the resignation of Ms Brenner last week.

In a statement issued shortly before AMP’s announcement today, ACSI said it was maintaining its recommended vote against all three director candidates and the remuneration report.

“We think board accountability is crucial given the magnitude of the issues revealed over recent weeks,” it said.

The Australian Shareholders Association, representing retail investors, had also declared its opposition to the re-election of retail veteran Ms Kramer and Ms Wallace, and the appointment of Mr ­Harmos.

ACSI is also calling a for a vote against the remuneration report in a move that could see a “first strike” against the company.

CGI Glass Lewis, which advises a number of institutional clients in Australia and overseas, had originally advised clients to vote for the directors. But it issued a revised report last week recommending against the director elections and in favour of the remuneration report.

Mr Wilkins and incoming chairman David Murray have both pleaded for shareholders to support the board and provide stability during a crisis that has badly damaged the company’s reputation.

The crisis over damaging revelations of “fees-for-no-service” at AMP peaked last week, with the resignations of Ms Brenner and the sacking of chief counsel Brian Salter.

Chief executive Craig Meller’s previously announced retirement was brought forward to last month.

Both Craig Meller and Catherine Brenner have gone from AMP. Pic: John Feder./

Mr Wilkins was elevated to acting chief executive and then executive chairman last week as damaging revelations about the company’s practice of charging fees for no service sparked recommendations at the royal commission for criminal charges against AMP.

Counsel assisting Rowena Orr QC told the royal commission that it should be open to finding that in four of the 20 times AMP misled ASIC over the fee-for-no-­service scandal, it breached four sections of the Corporations Act that carry criminal penalties.

AMP “strenuously denies” allegations it may have committed a criminal offence by misleading regulators.

It also insisted “there is no evidence” to suggest that its board acted inappropriately in relation to the preparation of a Clayton Utz legal report investigating the fee-for-no-service issue.

Mr Wilkins will hand over to Mr Murray — the former long-running chief executive of Commonwealth Bank and inaugural chairman of the Future Fund — sometime before July 1, and is overseeing the hunt for a new chief executive and a new board director.

AMP is losing support among the investment community, with leading analyst James Coghill slapping a “sell” recommendation on the stock — down from a “hold” — and lowering his price target from $5.40 to $3.80 amid expectations the company faces years trying to rebuild trust.

AMP shares have plunged from a March high of $5.47 to as low as $4.02 last week.

With Andrew White