AMP directors' 25% pay cut scorned as a 'slap on the wrist'
A 25% pay cut for AMP’s directors is a “slap on the wrist” that will do little to deter future misconduct, the shareholders’ association says.
AMP announced on Monday that its chairwoman, Catherine Brenner, and general counsel, Brian Salter, would step down after the fees-forno-service scandal.
It also announced that its other directors would have their fees cut by 25% for the remainder of the year. The Australian Shareholders’ Association said the pay cut would mean little for the directors of Australia’s largest wealth management firm.
Sign up to receive the top stories in Australia every day at noon
Last year Brenner was paid a total of $660,000, and AMP’s nonexecutive directors were paid between $263,000 and $413,000. That included between $204,000 and $261,000 in fees directly for their work on AMP board and committees.
Most of the directors were paid between $81,000 and $141,000 for their work on other AMP group boards, and between $11,000 to $24,000 for additional board duties.
Allan Goldin, the ASA’s New South Wales company monitoring committee chair, said he doubted the 25% cut would act as a deterrent.
“It’s a slap on the wrist,” Goldin told Guardian Australia. “I mean, maybe it’s going to be the equivalent of $50,000 because I assume it’s going to be on their base pay.
“But if you look at Holly Kramer and Vanessa Wallace, both of them in the last year got about $310,000 to $320,000 from the company. So is that a big deal? Does that mean you’re not going to go and do something in the future?”
Brenner’s and Salter’s departures follow revelations at the royal commission that the company repeatedly misled the corporate regulator.
The wealth management firm also influenced an independent report on the fees-for-no-service scandal, prepared by the law firm Clayton Utz. The changes to the report suggested by AMP appeared to minimise the culpability of the company’s most senior executives.
The ASA has previously announced it would use its sway to vote against two of AMP’s directors – Kramer and Wallace – at the annual general meeting in two weeks. It was undecided on a third Andrew Harmos, who was not appointed to AMP’s board until later.
Last year the ASA represented the company’s 19th largest shareholder.
Goldin said the ASA was reevaluating its position in light of Monday’s announcement. He said the current mood appeared to be to vote against the re-election of all three “because we’re talking about collective responsibility”.
“If that’s the case, we’re voting against these three, we would also be voting against other directors as they come up for re-election. That would include Mike Wilkins, who we would be voting against also.”
The ASA is urging retail shareholders to make their voices heard at the board meeting.
“We really hope that retail shareholders get out and vote,” he said. “Retail shareholders are really bad about voting. If they’re in Melbourne, we want them to attend the AGM and make their voice heard.”
Brenner was asked to step down after a crisis meeting held by AMP on Sunday. The scandal has already resulted in the resignation of the AMP chief executive Craig Meller and wiped $2.2bn off the company’s market value.
In an announcement on Monday, AMP said the board was unaware of the extent of interference with the Clayton Utz report.
“The board, including the former chairman, were unaware of and disappointed about the number of drafts and the extent of the group general counsel’s interaction with Clayton Utz during the preparation of the report,” it said.