AMP chairman David Murray, along with the rest of the board, could see their seats overhauled, with shareholders signalling they will be voting against the bank’s remuneration report at its annual meeting next week.
The current board could be out with a second strike after it received a first against its proposed remuneration last year, which saw 62 per cent of shareholders reject the board’s salaries.
A spill would only need 25 per cent of votes against the new remuneration report.
The Australian Shareholder’s Association has indicated it is planning to vote against the board’s proposed pay at the meeting next week, although it is in favour of Mr Murray staying in his position.
The body said that while the bank’s board slashed bonuses and adopted a new remuneration model in line with ASA’s guidelines, it has not been finalised, giving insufficient detail about new KPIs, targets or vesting.
“This is compounded by an excessive sign-on benefit for the new CEO, with the sole vesting condition being continuous employment,” the ASA noted.
It has also expressed concern about governance and culture at AMP, saying the “incentives revealed to date are weighted in favour of driving the share price up”.
The bank also failed to seek shareholder approval for its sale of its life business, which has been a point of dispute for the ASA.
On Mr Murray remaining chairman, the ASA commented, “His considerable regulatory and banking experience will be required in light of the magnitude of the task ahead for the AMP board.
“His appointment has no doubt helped attract the experienced non-executive directors the company needs. The changes to board structure and remuneration also reflect his involvement and commitment to change for the organisation.”
The board has already been reshuffled considerably, with its last appointment being Debra Hazelton as a non-executive director and Trevor Matthews stepping down and becoming the AMP nominee for the Life board on completion of the Life sale.
At the end of March, Geoff Roberts retired from the board, with Andrea Slattery taking his place and becoming chairman of the AMP Limited and AMP Bank Audit Committees.
The bank has admitted it has a long road to recovery. New chief executive Francesco De Ferrari told shareholders that 2019 will be a transitional year for the company, saying the company’s business model is ‘challenged’.
He did, however, say in the annual report that financial advice will “will remain a cornerstone” of the group.
AMP, NAB, Westpac and ANZ all received large first strikes against their remuneration reports last year.
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