AMP POSTS BIG LOSS BUT THERE’S GOOD NEWS FOR CEO
THE AMP board has delivered a booster shot to chief executive Francesco De Ferrari’s pay package despite the group’s slump deep into the red over the past year.
Little more than a year after he took on the top job, Mr De Ferrari is now eligible for a short-term bonus of up to double his annual base salary.
Based on the base salary of $2.2 million a year he was handed when he joined AMP in December 2018, that means he could get a shortterm bonus of another $4.4 million.
The sweetener was announced yesterday as AMP told shareholders it had scrapped its final dividend after posting a $2.5 billion loss for the year to December.
When quizzed by journalists about the timing of the lift in his potential bonus, Mr De Ferrari said his pay was “a matter for the board”.
In a statement accompanying the embattled wealth management group’s fullyear results, the board said the lift in Mr De Ferrari’s maximum short-term bonus replaced the previous maximum of 120 per cent of his base salary.
The previous maximum was set when Mr De Ferrari was appointed chief executive. AMP said the new terms would be effective for this calendar year.
“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 shortterm incentive opportunity achievable if all targets set for the CEO are exceeded.
“The CEO’s ‘on-target’ STI (short-term incentive) 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 longterm bonuses.
He pointed out yesterday that the short-term bonus was discretionary.
“The announcement is the maximum opportunity … I suppose if I don’t perform I don’t get paid.”
AMP yesterday reported a 32 per cent slump in full-year underlying profit, which excludes one-off items, to $464 million as fund outflows of $6.3 billion weighed on the results.
The $2.5 billion net loss was due largely to a $2.35 billion impairment announced in the first half, followed by an extra $55 million hit in the second half.