Francesco De Ferrari must take control of the ongoing AMP circus

AMP boss Francesco De Ferrari. Picture: Britta Campion / The Australian

Surely it’s about time AMP chair and former Credit Suisse adviser David Murray had a chat with former Credit Suisse executive colleague and now AMP boss Francesco De Ferrari about how to run the 171-year-old company.

If Murray needs some legal advice he can turn to fellow board member and former Credit Suisse Australian boss John O’Sullivan.

Francesco’s former Credit Suisse Singapore colleague Alex Wade walked on Thursday after approaching his old boss earlier this week to discuss a personal conduct issue.

It was clearly decided he should leave.

Wade arrived in town in December 2018 to run the Australian operation and soon after put the cleaners through its financial planners, including ending the long-running payout terms for planners. There are 2000 aligned financial planners on AMP’s books who didn’t have Wade at the top of their gift list.

The company won’t discuss the conduct in question but it was obviously considered of such an order that Wade should depart.

AMP has now sold its life division, which means it has three operations left.

New Zealand, which it reportedly wants to exit, was being run by 11-year veteran Blair Vernon. He will now run Australia, which includes the angry planners and the bank run by Rod Finch.

Then there’s AMP Capital which is run by Boe Pahari — more on him later.

Where Murray should get involved is to ask De Ferrari what exactly he is doing to earn the $7.4m he pocketed in the 2019 financial year and something similar last year.

Now insurance has been sold to young Clive Cowdery at Resolution Life it seems Francesco must be looking for something to do between 9am and 5pm.

If it’s strategy we will look for some clues next Thursday when he releases his latest results, but hopes are not high.

If it’s culture then the abrupt departure of his old mate Alex, running the Australian operation, tells you everything you need to know.

In all seriousness, how many layers of management does the shrinking empire really need?

Maybe on behalf of shareholders, Murray could raise the issue and even hold Francesco to account on the issue.

Fact is, right now AMP is fast becoming a hot soap opera.

Wade replaced royal commission star and 20-year veteran Jack Regan.

While not commenting on Vernon’s ability, it is noteworthy that De Ferrari would see the need for an Australian boss.

None of this tells a pretty tale about corporate culture, which is another reason why you wonder why De Ferrari isn’t taking direct control of the shop.

On August 13 the market will hear from Pahari, who has shot to fame as head of AMP Capital after serving time at, among others houses, ABN Amro.

Pahari, of course, was cleared after an examination of complaints from what shareholders were told was from one person alleging eight counts of sexual harassment on one night, of which five were dismissed and three had some factual basis.

He was fined $500,00, which to you and me is a lot of money but to Boe was 25 per cent of his annual bonus. Next week we get to learn about his strategy, which is about time given he has been in the job for two months, selected his team and been surrounded by constant talk about his past behaviour.

De Ferrari, who has been at AMP since January last year, has appeared in the press several times appealing for some sense in governing financial advice.

Frankly he should get his own house in order before telling others what to do.

Thursday’s news is not exactly evidence of life looking better within AMP, which must be of some concern to Murray given the stock on a total return basis has underperformed by 64 per cent since he took the job in May of 2018.

Rio called to account

Rio boss Jean-Sebastien Jacques will be full of apologies and contrition at today’s parliamentary hearing into the Juukan Gorge disaster as he carefully throws his iron boss Chris Salisbury under the bus.

Committee chair Warren Entsch confided he doesn’t want to hang anyone — he just wants to know what went wrong, because clearly something went very wrong.

He’ll get furious agreement from Jacques on this score.

Entsch also wants to explore the relationships between the traditional owners and their representatives dealing with the miners.

Entsche says he won’t be looking to point the finger but clearly answers are needed from the Rio board, starting with Jacques.

Case dismissed

The High Court this week put an end to two long-running court battles for the corporate plod, with Cive Palmer losing his attempt to get a hearing on ASIC’s case against him for the Coolum takeover back in 2012, and the Storm Financial duo Emmanuel and Julie Cassimatis losing their attempt to get a hearing.

The later case now goes back for a hearing on the level of costs going to ASIC.

The Palmer Coolum case now goes back to the Brisbane Magistrates court in November for a directions hearing in the case alleging breaches of the Takeovers Act.

Salary sacrifice

Scentre chair Brian Schwartz has decided his board colleagues and executive have coped with enough COVID pain. After taking a pay cut in April, their remuneration was restored to normal from the beginning of this month.

Lucky for chief executive Peter Allen, because last year’s pay totalled $7.5m and cash of $3.7m, so the three-month pay cut probably meant he was still able to pay the rent.

The 2020 financial year was generally considered disaster territory for executive pay, given the impact of COVID-19.

That helps explain why asset writedowns will be coming thick and fast, in part because asset values have fallen, and with depreciation payments down future profits will be up, which means better pay levels.

The good news from ACSI’s annual executive pay study is boards are taking a tougher view on bonuses, which were at only 60 per cent of the maximum in 2019, down from 70 per cent the prior year.

Cash bonuses for the top 1000 came in at a median $939,593 compared to slightly less in 2018, but you have to go way back until 2004 to see cash bonuses at lower levels.

More bonuses are being paid in scrip which better aligns with shareholders, as shown by the $1.7m paid in 2019 which was the second-highest payout in the previous nine years.

ACSI’s Louise Davidson was pleased to see a tougher line from boards with 25 of the top 200 receiving zero bonuses compared to seven in 2018.

The highest paid was IDP Education’s Andrew Barkla, which is interesting given the company is controlled by a bunch of universities. But then again his $37.8m was largely due to a stunning stock price and some option exercises.