AMP avoids second strike on pay, board appointees approved

AMP shares regained some ground after more than 89pc of investors backed its pay report.

AMP CEO Francesco De Ferrari ahead of today’s AGM. Picture: AAP

Besieged AMP has avoided a second strike against its pay report, as the wealth company’s leadership turns its focus to a multi-year turnaround after Hayne royal commission-inspired turmoil.

More than 89 per cent of investors voted in favour of the remuneration report, with 10.6 lobbing a protest vote against the document at AMP’s annual general meeting in Sydney. That was enough to save AMP from a second strike and potential board spill.

AMP’s (AMP) chairman David Murray copped a protest vote of about 13 per cent from investors but was easily elected to the board. The elections of non-executive directors John Fraser, Andrea Slattery and John O’Sullivan were also overwhelmingly supported by shareholders.

Ahead of the AGM, several institutional investors vowed to vote against Mr Murray’s election due to AMP signing off on a controversial $3.3 billion sale of its life insurance unit in the latter half of last year.

In his speech to investors, Mr Murray defended the sale and said as well as fixing its culture AMP needed to ensure it had viable systems to avoid the governance and compliance issues of the past.

“There is no quick fix but with the right leadership, capability, systems and customer focus, we intend to turn this business around,” he said.

“In setting the appropriate model, there must be a clear link between remuneration and consequence management and accountability.”

New chief executive Francesco De Ferrari told investors part of his initial set of priorities was stabilising and transforming AMP and providing employees with a “clear sense of direction”.

“This transformation of AMP is going to be a multi-year journey and will not happen overnight,” he said.

The AGM came after AMP announced that new chief financial officer, John Patrick Moorhead would take over from incumbent Gordon Lefevre on June 1.

AMP also gave a business update which revealed net cash outflows of $1.8bn from its wealth management business in the first quarter, eclipsing the $200 million in net outflows in the same period in 2018.

That figure included $538m of regular pension payments, but the company acknowledged it also reflected continued weakness in inflows and higher outflows following the royal commission.

AMP shares pared some its steep morning losses and closed down 6 cents, or 2.6 per cent, at $2.25 after dropping more than 5 per cent to as low as $2.18 earlier in the day.

At the royal commission, AMP was accused of misleading the corporate regulator on numerous occasions and was also entangled in a scandal where advisers charged fees when no services were provided.

The furore led to the departure of prior CEO Craig Meller and chairman Catherine Brenner.

Last year, investors hit AMP with a 61 per cent vote against its pay report, and another strike this year could lead to a spill of the board.