AMP's D-Day

It was D-Day for AMP. In only a few short hours their reasonable first quarter results for 2018 were forgotten as Australia's largest protest vote book-ended a day of intense criticism for the wealth giant.

After weeks of what can only be described as unusual and disastrous consequences for the wealth manager in the wake of executive Anthony Regan's statements in front of the banking royal commission, today was the day they faced the shareholders. 

It's unlikely that a sturdy boot-camp was prepared for interim chief executive Mike Wilkins and Co. given the chaos which saw them lose Wilkin's predecessor, their board chair, two other directors, and $2.2 billion in share value over the last month. 

One could almost forgive them for the lack of preparation, if not for Regan's admission the bank had lied to the corporate regulator 20 times over instances of charging financial planning customers despite providing no services. Or that the now former chair Catherine Brenner had significantly altered a supposedly independent report handed to the Australian Securities and Investment Commission about the scandal. 

Nevertheless, in a dark blue room in central Melbourne, the six surviving members of the AMP board set about charging up the beaches towards thousands of shareholders out for blood in an effort to restore some reputation. 

The sharpshooters lined up, Crickey founder Stephen Mayne and ex-premier of NSW Nathan Rees bolstering their stocks; ensuring they wouldn't miss. 

In a two hour opening volley reminiscent of traditional airing of grievances at Festivus, investors ran through the litany of issues they had with AMP.

Opening fire 

"Back when I went school, compliance was a bit like pregnancy – you either were or you weren't. So in light of everything at this time, could the board explain why they still think compliance is a matter of degree?" Said one. 

Another asked this: "I'm not necessarily someone who believes women should have 50 per cent of the jobs […] 50 per cent of your board has resigned, but all of them have been women, why is this?" 

And by the time this had wrapped up, they had received a fifth as many questions over their approach to climate change as their misleading statements to ASIC. The appointment of David Murray as the new chair and his absence also copped flack. 

Next on the agenda was the re-election of Andrew Harmos to the board. The new chairman of the Bank's risk committees and member of the audit and risk committee looked the most nervous of directors in Melbourne. 

But as the meeting moved past its second hour he could breathe a sigh of relief. Instructions from the Australian Shareholders' Association and others to oppose him was not enough to deny Harmos a second year in the role. Albeit after a brief controversy surrounding the decision to not reveal proxy votes.  

Harmos passed the first checkpoint, but in battles there is always one casualty. 

Today it was AMP's remuneration report.

Casualties   

Earlier, Wilkins had resigned himself to the fact that this was never going to survive, but it's uncertain if he had braced for the largest protest vote in Australian history. 

"Based on the proxy position on the remuneration report, today we expect to receive our first strike on this matter," he had said in his address. 

"We recognise that many of our shareholders have voted against the remuneration report in response to the wider business issues […] we understand your frustration and we've heard you." 

61.5 per cent voted against the approval of the document which would set out pay structures for the board and executives; propelling it straight to the top of corporate mutinies ahead of the 49 per cent rejection Commonwealth Bank felt in 2016 for their remuneration report. 

Aftermath

As they left the conference hall, the directors probably looked around the battlefield thankful that only the remuneration report had fallen. However, a second glance would have revealed they were no closer to the pastures of France.  

"You've given us an unreserved apology this morning," said one Mr Solomon. "Unfortunately it is too little too late. Your board has not only destroyed shareholder value, but you will go down in history as the board that stole from their client base as well and lost trust completely." 

It was scarcely the first shot fired, but it certainly rang the most true.   

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