David Murray suffers first defeat at AMP

Incoming AMP chair David Murray wanted the three directors re-elected, but investor vigilantes got their way.

Incoming AMP chair David Murray may have wanted some stability on the board, but that’s not what he will inherit. Picture: Mike Batterham

Incoming chairman David Murray has suffered his first defeat at AMP, with three directors quitting today rather than face a huge protest vote against them at Thursday’s annual meeting.

Two of the directors, Holly Kramer and Vanessa Wallace, were up for re-election and had a firm vote against them as proxies closed, with more to come following a last minute chang of heart from BlackRock.

To protect their other board seats, they have quit today rather than face the potential ignominy of defeat.

We will know more on Thursday when Andrew Harmos’s vote is posted, because while new to the AMP board he has also served on the AMP Life board for five years, so is as culpable as Kramer and Wallace in the turmoil at the wealth manager. yet somehow was being treated as a different case.

Patty Akopiantz was the longest serving AMP director left and was due to go next year in any case, but has decided to announce now that she will be stepping down at the end of 2018.

Murray and stand-in chief executive Mike Wilkins had both been backing the re-election of the three directors at Thursday’s meeting, so whichever way you cut it they lost with the departures.

Murray had wanted a full slate to see the lie of the land before making his moves in the wake of the damaging revelations at the banking royal commission, but the shareholders have taken that choice from him.

Any early goodwill to the new regime has clearly gone at this instance, with shareholder vigilantes winning the day.

Ownership Matters, which advises the Australian Council of Superannuation Investors, had maintained a vote against the three directors up for re-election. And CGI Glass Lewis, which advises a number of institutional clients in Australia and overseas, had changed tack to recommend against them their re-election.

In short the numbers were against the three directors, who happened to face re-election in the wake of the royal commission revelations that AMP had stolen from customers and lied to the regulator.

No-one outside the board knows whether the departing three were on either side of any debate in the board, but that is the luck of the draw.

They have quit now in deference to shareholder wishes and to protect their non-executive careers.

Murray now needs to find a new chief executive and three new directors at a time when he is trying to restore trust in the embattled wealth manager.

In one sense a clean broom is good but Wilkins and Murray both wanted some stability. They got the exact opposite.

And the timing is terrible for everyone, not to mention the fact that Mike Wilkins’ wife is very ill.