AMP dumps vote for $1.6m De Ferrari bonus

AMP has confirmed the withdrawal of the fourth resolution from its 2021 annual meeting, which would have seen shareholders decide on the approval of a long-term incentive for chief executive Francesco De Ferrari.

But as declared at the beginning of the month, Mr De Ferrari will be exiting from the company later in the year, as it completes its portfolio review. He will no longer be entitled to his long-term incentive payments.

The 2020 remuneration report has included no short-term incentives or pay increases for the CEO and key management personnel, as the company has sought to respond to a challenging environment and the wrath of shareholders at its last annual meeting.

Two-thirds of shareholders voted against AMP’s 2019 remuneration report, launching a strike against the board as they protested the increase of Mr De Ferrari’s maximum short-term bonus to 200 per cent, from its previous 120 per cent.

AMP had decided to grant the raise, despite the company copping a $2.5 billion loss for the 2019 year.

The board could face a spill at this year’s meeting if shareholders force another strike, under the two-strike rule. Only 25 per cent or more opposing votes are required to enact a strike and the consequent spill motion.

Mr De Ferrari has received a fixed remuneration of $2.2 million, with potential short-term and long-term bonuses potentially reaching maximum values of up to 200 per cent and 100 per cent of his base salary, respectively.

As outlined in the notice for the upcoming annual meeting, Mr De Ferrari was up to receive 1,334,141 performance rights, allowing him to acquire $1.6 million in shares on vesting (based on the current $1.24 share price).

ANZ deputy CEO Alexis George will take his place from the third quarter, with a base salary with a $1.7 million per annum.

She has the opportunity to earn a short-term incentive equivalent to 100 per cent of her salary as well as a maximum long-term bonus of a target value equal to 100 per cent of her salary, if she hits her performance hurdles.

Ms George will also receive a sign-on award with a value of $4 million, to be delivered in AMP equity, to replace her foregone incentive arrangements with ANZ.

AMP’s annual meeting will take place on 30 April.