The Australian Council of Superannuation Investors (ACSI) has welcomed the resignation of AMP Chair Catherine Brenner, as a “belated gesture of board accountability” following revelations at the banking Royal Commission, but says more action is needed.
AMP also today announced that Group General Counsel and Company Secretary Brian Salter will leave the company, with the forfeiture of his outstanding deferred remuneration. AMP CEO Craig Meller resigned with immediate effect on 20 April, part way through the Royal Commission’s latest public hearings.
ACSI CEO Louise Davidson said: “It is important that the [AMP] Board has announced changes including the appointment of a new chair and plans for a new director. But more than this, we want to see underlying governance and culture issues addressed – issues of which we trust the Board is now painfully aware.”
“Clearly a lot of change is required at the company. This must extend to further board renewal. Investors need reassurance that the poor culture and governance practices exposed at the Royal Commission have been banished and new perspectives installed.”
ACSI members include a number of large superannuation funds and collectively manage over $2.2 trillion in assets and own 10% of every ASX 200 company on average, according to the Council.
ACSI welcomed the reduction of fees for the Board and cancelling deferred remuneration for some staff, but also expects to see financial consequences for more executives. The Australian Shareholders Association has described the 25% pay cut for AMP directors as a “slap on the wrist”.
“It is appropriate that the Board claw back bonuses that have been paid in the past to executives involved in the misconduct,” said Davidson.
“There is a link between what has gone wrong at AMP and remuneration practices. Companies need to make sure staff incentives are consistent with ethical corporate behaviour, which has clearly not occurred here.”
“There remains $12 billion dollars of investor capital at stake in the company. We expect to see further change at the board and executive level.”
ACSI says its recommendation that its members vote against the remuneration report at the upcoming AMP general meeting stands, and will review the existing recommendations to members on the remaining AMP directors in light of the announcements by AMP.