FIRST STRIKE! AMP shareholders revolt in the biggest corporate rebuke in Australian history

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  • AMP’s remuneration report was rejected by a record 61.4% of shareholders at today’s AGM.
  • Director Andrew Harmos, who joined the board in June last year, was re-elected with a vote in favour of 62.33%.
  • Interim chairman Mike Wilkins apologised to those attendance, calling the company’s recent scandals “unacceptable”.

AMP shareholders vented their anger with the company’s now heavily depleted board at today’s annual general meeting (AGM), delivering the biggest rejection of the executive remuneration report in Australian corporate history.

An astonishing 61.4% of AMP shareholders voted against the remuneration report, delivering a “first strike” to the company’s board.

Under two-strike laws introduced in 2011, a vote of 25% or more against the remuneration report for two straight years gives shareholders the chance to spill the entire board.

Two directors, Vanessa Wallace and Holly Kramer, resigned this week when it became apparent that that did not have majority support from shareholders for their reappointment. While not disclosed at the AGM, its believed they both had votes of 60% against.

AMP’s longest serving boardmember, Patty Akopiantz, also announced her intention to step down at the end of the year prior to the meeting.

Director Andrew Harmos, the board’s most recent addition, joining in June last year, survived a push against his reelection today with a 62.33% vote in favour.

The Australian Shareholders Association has been recommending a vote against the return of all of AMP’s directors as they come up for reappointment.

Today’s “first strike” again AMP comes a week after struggling insurer QBE, which posted a full-year loss of $US1.25 billion ($1.6bn), received a 45.57% vote against its remuneration report.

AMP’s rejection smashes the previous record of 50% against the Commonwealth Bank of Australia remuneration report at its 2016 AGM.

The company has been reeling since revelations emerged at the financial services royal commission that the company deceived to the corporate regulator, the Australian Securities and Investments Commission (ASIC), as well as changing an “independent” report from Clayton Utz into the company’s behaviour.

Counsel assisting the royal commission, Rowena Orr, has recommended criminal prosecutions against the financial services giant arguing that it broke the law on multiple occasions. AMP denies the allegations.

AMP Chairman Catherine Brenner stepped down on April 30, followed by her three fellow female directors.

Today’s two-and-a-half hour meeting, with 500 people in attendance, was run by interim chairman Mike Wilkins, who in a 20-minute address apologised to shareholders and customers.

“We are truly sorry,” he said.

“The issues highlighted in our advice business are unacceptable. We let you down. We have let our customers down. And, we have let the wider community down.”

Wilkins said the behaviour of advisors who charged customers for services they did not deliver, as well as the subsequent attempts to mislead ASIC were “absolutely unacceptable”.

Thus far 15,712 AMP customers have been compensated a total of $4.172 million for the fee-for-no-service issue dating back to July 2008.

The chairman said he was “encouraged by the level of support” for actions currently being taken to deal with the challenges facing the wealth management giant.

The fallout from the scandal has now claimed half the board: the chairman, three independent directors, and former CEO Craig Meller, as well as group legal counsel Brian Salter.

Around $4 billion in value has been wiped off AMP’s shares since the details emerged at the royal commission.

Former NSW Premier Nathan Rees was at the AGM representing the Financial Sector Union accused the directors of being “complicit in extraordinary trashing of a once great brand” and wanted to know why the directors did not surrender all of their fees.

Wilkins revealed that he is not being paid as CEO, but said the 25% reduction in fees proposed by the board in the wake of the scandal was “appropriate”.

Asked about the reputational damage to the 169-year-old business, Wilkins said he could not “dollar value” but acknowledged that the royal commission had taken its toll

“AMP is a great brand that has been damaged and what we need to do is rebuild that,” he said.

“We are determined to do everything we can to restore the trust of our customers and of all Australians.”

The interim chairman’s replacement, former CBA boss David Murray, was not at today’s AGM.

Earlier this morning, AMP said that net cash out-flows had increased by around $200 million in the March quarter. The company said it would “vigorously defend” two class-action lawsuits brought against it.

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