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Tuesday 25

September, 2018 7:57 AM



Furious shareholders deal AMP first strike

Furious shareholders deal AMP first strike

Shareholders have dealt AMP a first "strike" at its AGM, as the company faced investors for the first time since revelations of misconduct were made public.

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By AAP 10.05.2018 05:06 PM

Furious shareholders have put AMP's board on notice, delivering a first "strike" with a resounding vote against the company's executive pay report, as the disgraced wealth manager's shares sunk to the lowest price in six years.

Almost two thirds of AMP shareholders voted against the remuneration report at the company's AGM in Melbourne, setting up a board spill if another vote of 25 per cent or more against the pay report is recorded next year.

Defiant director Andrew Harmos held on to his boardroom seat despite a campaign from the Australian Shareholders' Association (ASA) to remove him.

Thursday's meeting was a heated affair, with AMP's board grilled by shareholders over misconduct in its financial business, including charging customers fees for financial advice that was never delivered and repeatedly lying to the regulator about the behaviour.

Interim executive chairman Mike Wilkins began proceedings by apologising for the scandal, telling the packed room: "We let you down.

"We understand you want change. We understand you want answers," he said.

Mr Wilkins said he had been repeatedly asked why scandalous conduct was not revealed by AMP before it was exposed at the banking royal commission in April.

He said disclosing any facts could have prejudiced an ongoing Australian Securities and Investments Commission investigation.

Mr Wilkins said half AMP's board had left or is leaving and the company was reviewing its reporting and governance practices, with tough sanctions for anyone found to have acted inappropriately.

"I'm confident that we'll rebuild and restore trust and confidence in AMP," he said.

"But I am also realistic.

"The rebuild will not happen overnight."

Former Commonwealth Bank of Australia chief executive David Murray begins as AMP chairman in July but his pay packet won't be made public until February.

Shareholder activist Stephen Mayne urged the board to reveal Mr Murray's pay and show proxy votes on the positions of directors Holly Kramer and Vanessa Wallace, who had been up for re-election but quit before the AGM.

"Hiding the chairman's salary and hiding the proxy results is more duck and weave when you need to be really clearly transparent," Mr Mayne said.

Chairman Catherine Brenner resigned last week, while board member Patty Akopiantz, the longest serving director, will also step down at the end of 2018, leaving no women on the board.

Mr Harmos, speaking before he was re-elected with 62 per cent support, told shareholders they had every right to be angry but believed AMP and its people "can ill afford any more instability at this challenging time".

The ASA still wants the three remaining board members gone by Christmas, and will move against them at the next AGM if they are still present.

Meanwhile, AMP says it will vigorously defend two class actions bought against it after shedding more than $2 billion in market value since it began giving testimony at the banking royal commission.

AMP shares closed down 12 cents, or 2.9 per cent at $3.96, dropping to the lowest level since June 2012.

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