SYDNEY (Reuters) - Australia’s AMP Ltd (AMP.AX) on Wednesday said it will not pay short-term bonuses to most executives, a move that could help it avoid possible board removal should investors vote against its remuneration practices for the second consecutive year.
The country’s largest listed wealth manager has been embroiled in accusations of deception at a government-mandated inquiry into misconduct in the financial sector. The business subsequently lost its chairman and chief executive officer and haemorrhaged billions of dollars in funds.
“The board understands that many of our shareholders are disappointed with AMP’s business and financial performance in 2018,” Chairman David Murray said in the wealth manager’s annual report published on Wednesday.
“Reflecting the circumstances of last year, the board decided to award zero short-term incentives for AMP’s group leadership team in 2018,” excluding unit AMP Capital, which was not directly connected to any accusations raised in the inquiry.
The deferred part of bonuses for a number of former executives will also be forfeit, Murray said.
AMP believed shareholders had voted against pay plans last year in response to “wider issues” in the business as well as concerns about its remuneration framework, which was now being re-designed, Murray said.
Under Australian corporate rules, if more than a quarter of shareholders vote against a pay proposal for two years running, they can call for the board to be removed.
The annual report also showed Francesco De Ferrari, who began his term as chief executive officer on Dec. 1, was paid A$1.2 million ($847,440) cash in 2018, reflecting a buy-out payment to leave previous employer Credit Suisse Group AG (CSGN.S).
At the year-long Royal Commission inquiry last year, AMP revealed it charged fees without rendering services and had attempted to deceive regulators. The wealth manager denied any malicious intention and said the causes were administrative.
($1 = 1.4160 Australian dollars)
Reporting by Paulina Duran; Editing by Christopher Cushing