Yesterday’s resignation of AMP chair Catherine Brenner failed to placate retail and institutional shareholders, who are calling for bonuses to be clawed back along with a complete overhaul of the board.
AMP announced yesterday the resignations of chair Catherine Brenner and general counsel Brian Salter, following revelations at the royal commission on Friday that the company could be exposed to criminal charges.
Monday’s resignations followed the announcement on 20 April of the immediate resignation of AMP chief executive Craig Meller, who was due to leave the company at the end of 2018.
Board member Mike Wilkins has been appointed as executive chairman (encompassing both the chair and CEO roles) on an interim basis while AMP looks to replace both positions.
Speaking to ifa, Australian Shareholders Association (ASA) company monitor chair Allan Goldin said Ms Brenner’s resignation was “very good” but it should have happened before Monday.
AMP’s announcement that it will cut all director’s fees by 25 per cent for the rest of calendar 2018 is little more than a “nice little slap on the hand”, Mr Goldin said.
With AMP’s annual general meeting coming up on 10 May in Melbourne, the ASA will be recommending shareholders vote against the re-appointments of Holly Kramer and Vanessa Wallace, Mr Goldin said – as well as the appointment of a third director, Andrew Harmos.
The board of AMP should be “cleared out” completely over the next two to three years – and that includes Mike Wilkins, who Mr Goldins pointed has been the chairman of AMP’s risk committee since May 2017.
Shareholders should also vote against the AMP’s remuneration report, Mr Goldin said – something the ASA would be opposed to even without the revelations at the royal commission.
There should also be clawbacks of bonuses for AMP executives who were directly responsible for the “wrong behaviour” that has been exposed throughout the royal commission hearings, he said.
The Australian Council of Superannuation Investors (ACSI), which represents institutional AMP investors, described Ms Brenner’s resignation as a “belated gesture of accountability” for misconduct revealed at the royal commission – adding that “more is needed”.
“Clearly a lot of change is required at the company. This must extend to further board renewal. Investors need reassurance that the poor culture and governance practices exposed at the royal commission have been banished and new perspectives installed,” said ACSI chief executive Louise Davidson.
ACSI expects more “financial consequences” for AMP executives as problems with AMP’s advice division continue to be uncovered, Ms Davidson said.
“It is appropriate that the board claw back bonuses that have been paid in the past to executives involved in the misconduct,” she said.
ACSI said it would “review our existing recommendations to members on the remaining AMP directors once we have had a chance to discuss today’s developments with the company.”
“Our recommendation to members to vote against the remuneration report at the upcoming AMP annual general meeting will remain unchanged,” said ACSI.
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