AMP dodges second strike as chair says rebuilding trust is key

AMP’s outgoing chair Debra Hazelton says the wealth manager is focused on improving its performance.

Outgoing AMP chair Debra Hazelton,left, and incoming chair Mike Hirst at the company's 2024 AGM in Sydney.

Outgoing chair Debra Hazelton secured overwhelming shareholder backing for AMP’s remuneration report at its annual general meeting, averting a second strike as she acknowledged the 175-year-old wealth manager’s ongoing efforts to rebuild trust.

Ms Hazelton replaced David Murray as chair in late 2020 following a tumultuous period including a massive reputational hit from the fee-for-no service revelations at the Hayne Royal Commission in 2018 and cultural issues that came to the forefront during Francesco De Ferrari’s term as CEO.

Last year, more than 49 per cent of shareholders voted against the 2022 report, as investors rebuked the company’s share price performance and executive payouts.

At her last AGM on Friday morning, Ms Hazelton presented a slide showing that over 92 per cent of votes cast had supported the pay plans for the 2023 financial year ending last December, with only 7.6 per cent of votes received against them.

A second consecutive strike this year would have forced a vote on whether to spill the board of directors.

“I have been informed that a second strike will not be received on the remuneration report,” Ms Hazelton told the meeting.

AMP has returned about $850m to shareholders through dividends and buybacks.

However, despite a recent recovery, the company’s shares are still down 18 per cent from their level when Ms. Hazelton became chair in August 2020, although the losses had peaked at over 40 per cent in November.

Ms Hazelton said the company had sought feedback from key stakeholders after last year’s first strike against the 2022 remuneration report.

“We have taken action to address some of the key concerns,” she said. That included being more transparent in disclosures of short-term incentive targets and increasing the weight of financial metrics to 60 per cent, from 40 per cent, she said.

Addressing investor questions about whether AMP will deliver more value for shareholders in the future, Ms Hazelton said the board and management were focused on executing the company’s strategy, including improving the performance of the bank and achieving “breakeven” in the Advice unit.

“I can’t forecast the share price, no one can,” she said. “What the board and the management are committed to is relentlessly delivering on the strategy to improve the performance and value of the business, and that’s what we are doing now.

“If we continue to execute successfully on our strategy and improve the underlying fundamentals of the company in the medium term, this will be reflected in the market value of the company,” she said.

“AMP has a bright future – but business transformations take time. We remain absolutely committed to continue to work hard to deliver value for our shareholders.”

Ms Hazelton also acknowledged there is still much more to do to continue to rebuild trust among clients and the broader community.

She had led a culture and governance overhaul with a refreshed leadership team, a streamlined portfolio with a clearer strategic focus, and delivered capital returns to shareholders, she said.

“The restoration of trust for AMP has been a major driver of every decision the board has made over the last few years,” Ms Hazelton told the AGM.

“There is also sound evidence that we have come a long way in rebuilding that trust and our reputation with the broader public. While we are very aware that there is still much more to do, the positive momentum we have built is critical as we focus on the future for growth.

“Delivering on a cultural change agenda is definitely not easy, but I believe we have established a culture that is anchored to our purpose, while also embracing elements of innovative thinking and management agility,” she said.

“Importantly, we have also significantly enhanced AMP’s risk culture in recent years, giving us a strong foundation from which to make decisions for the future of the business.”

Ms Hazelton will be replaced by former Bendigo and Adelaide Bank chief executive Mike Hirst, who began his term immediately after the AGM ended on Friday.

Addressing the meeting, Mr Hirst thanked Ms Hazelton for stabilising the company during her term and the governance changes she oversaw.

“Everyone would understand the reputational issues that needed to be addressed. Deborah’s leadership, council, knowledge and frankly sheer hard work have been at the forefront of dealing with those matters and stabilising the company,” he said.

“If the true test of stewardship is leaving a place in a better state than you found it, Deborah graduates from AMP with honours. I know how I have very big shoes to fill.”

He said he was “very humbled” to have the chance to head the “iconic” Australian company.

“I can assure all stakeholders that I will work very hard to assist in the continuing improvement of the company’s performance,” he said.