Ownership Matters to back AMP directors at AGM due to ‘lack of’ alternatives

Ownership Matters has cited a lack of alternatives as it became the latest proxy adviser to back AMP.

AMP chairman David Murray. Picture: Hollie Adams

Ownership Matters has cited a lack of alternatives to the current AMP board as it became the second proxy advisory house to come out in favour of under-fire wealth group’s annual general meeting resolutions.

AMP chairman David Murray and three other relatively new non-executive directors are up for election at the company’s May AGM, which will see a new-look board voted on. It follows a strike last year of 61 per cent against AMP’s pay report, which if repeated could lead to a board spill.

“The recommendation in favour of the election of Murray and his fellow board members takes into account the lack of alternatives to the current board, the difficulty in recruiting new board members to serve on the AMP board given the circumstances of the company and the challenges created by these circumstances for the AMP board in place since Murray became chairperson in June 2018,” the Ownership Matters’ report, obtained by The Australian , said.

Even though Ownership Matters advised shareholders to support the election of directors, it noted those who disagreed with AMP’s decision to sell its life insurance arm for $3.3 billion could vote against.

“Shareholders who object to the terms of AMP’s agreed sale of its life business to Resolution Life announced in October 2018 may wish to vote against the election of directors who were on the board when this transaction was agreed,” it said.

“In discussions prior to the AGM, the chairperson stated that should there be a large vote against his election at the AGM, the other directors seeking election who were also on the board at the time of the Life sale being agreed — John Fraser and John O’Sullivan — would resign given they were part of that decision.” Ownership Matters went on to say that it asked AMP if that information should be disclosed to the ASX given the consequences for shareholders.

“AMP’s representatives said ‘nothing had been decided’ and that John Fraser and John O’Sullivan would ‘make up their minds’ separately as to whether they would remain on the board in the event of a large vote against Murray’s re-election.”

Allan Gray’s managing director Simon Mawhinney has previously said that while his firm intended to back AMP’s remuneration report, it would vote against Mr Murray’s election.

Several other large institutional investors are weighing their positions, while Merlon Capital Partners has signalled the firm would vote against Mr Murray’s and Mr O’Sullivan’s election.

Allan Gray’s investor update sent out on Wednesday said it believed there was no trading idea “more contrarian” than AMP, given its shares had tanked more than 50 per cent over the past year.

“Today one pays very little for AMP’s most troubled division, wealth management, and even a mediocre outcome over time could provide for good investment returns,” it said.

On Tuesday, proxy adviser CGI Glass Lewis urged AMP shareholders to vote in favour of director elections and its pay report.

JOYCE MOULLAKIS