AMP avoids second strike, despite ‘disappointing’ year

AMP put parts of the business up for sale in October but only one potential buyer came forward with a series of non-binding offers. The process ultimately ended six months later with no deal being signed.

AMP chair Debra Hazelton, who took over in August when David Murray resigned amid the harassment scandal, acknowledged shareholders are “very disappointed about where AMP is today”.

However, she sought to assure them the completion of AMP’s “very complex transformation strategy” to simplify the business would lead to long-term growth and a higher share price. “Turning the business around requires time and effort,” Ms Hazelton said.

The executive at the centre of last year’s sexual harassment scandal – Boe Pahari – will soon leave the company and could be paid up to $70 million in performance bonuses.

Ms Hazelton said any additional payments made out to Mr Pahari would be “carried interest” and dependent on the health of the infrastructure fund he managed, adding any money would not come from AMP’s coffers.

“This is very important. The carry is paid by the funds, not by the company that manages the fund nor the shareholders,” Ms Hazelton said.

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AMP announced this week plans to spin off and separately list AMP Capital’s private markets business under new management and fresh branding.

Major shareholder Allan Gray had previously questioned AMP’s plan to retain a 20 per cent stake in the new business. Ms Hazelton said a final decision on whether on this had not yet been made.

The demerger of AMP Capital came weeks after the company was forced to disclose chief executive Francesco De Ferrari would resign mid-way through his tenure, following a report in the Australian Financial Review.

Ms Hazelton stressed the early resignation was caused only by the reduced size and scale of the company and Mr De Ferrari pledged to support an orderly transition of leadership to the newly appointed chief, Alexis George.

“Executives need not be judged not just on how they perform when they’re in the role but importantly what happens in the immediate period after they leave the role,” Mr De Ferrari said. “Leading your company has been an absolute privilege.”