AMP sweetens remuneration deal for CEO Francesco De Ferrari

A massive loss and dumped dividend haven’t stopped AMP’s board from sweetening the deal for CEO Francesco de Ferrari.

AMP chief executive Francesco De Ferrari. Picture: John Feder.

The AMP board has delivered a booster shot to CEO Francesco De Ferrari’s remuneration package just over a year after he took on the top job, with the embattled wealth manager’s most senior executive now potentially eligible for a 200 per cent bonus on top of his $2.2m salary.

The salary sweetener was announced on the same day that AMP told shareholders it had scrapped its final dividend after posting a $2.5bn full-year loss.

In a statement released to the market on Thursday accompanying the scandal-plagued wealth manager’s full-year results, the board said the lift in the maximum short-term incentive opportunity replaced the previous maximum of 120 per cent of base salary, set when Mr De Ferrari was appointed CEO in August 2018. The new terms will be effective for the year ending 31 December 2020, AMP said.

“The change brings the CEO’s short-term incentive potential into line with the policy intended to apply for senior executives,” the wealth manager said.

“The change will only apply to the maximum short-term incentive opportunity achievable if all targets set for the CEO are exceeded.

“The CEO’s ‘on-target’ STI opportunity remains unchanged, at 100 per cent of base salary. There are no further changes to any other previously disclosed terms.”

Mr De Ferrari also has the potential to earn a further 159 per cent of his salary in long-term bonuses.

When quizzed by journalists about the timing of a lift in his potential bonus on a media call, Mr De Ferrari said his pay was “a matter for the board”.

He also pointed out that the short-term incentive payment was discretionary.

“The announcement is the maximum opportunity... I suppose if I don’t perform I don’t get paid.”

Mr De Ferrari joined AMP in December 2018 after 17 years with Credit Suisse, where he was CEO South East Asia and Frontier Markets and Head of Private Banking Asia Pacific. He succeeded acting CEO Mike Wilkins, who served as interim CEO from April 2018 when Craig Meller stepped down amid shocking revelations heard at the banking royal commission.

AMP on Thursday posted a 32 per cent slump in 2019 underlying profit, with earnings dragged down by its wealth unit and fund outflows of $6.3bn.

The statutory result came in as a $2.5bn loss, largely due to a $2.35bn impairment taken in the first-half, which was topped up by an additional $55m charge in the latter six months.

Stripping out one-offs and market volatility, underlying profit came in at — $464m for the 12 months ended December 31, down from $680m for 2018.