SYDNEY (Reuters) - Embattled Australian wealth manager AMP Ltd is expected to survive a second shareholder vote in two years against its executive pay plans, but is still likely to face tough questions about its strategy at its annual meeting on Thursday.
Retail investor advocate the Australian Shareholders Association has said it plans to vote against the company’s remuneration report, but large institutional investors say they will vote in favor, likely sparing AMP the disruption of having its whole board removed.
Under Australian law, if more than a quarter of a company’s shareholders vote against pay proposals two years running, the shareholders can call for the board to be dismissed. Well over a quarter voted against AMP’s pay at its 2018 annual meeting.
The 170-year-old stalwart of Australian financial planning will be hoping the meeting in Sydney marks a turning point after a horror year in which it lost its chairman, chief executive and three directors as an industry inquiry aired allegations of high-level misconduct at the company.
The Royal Commission heard of companies across the finance sector charging customers fees for services not rendered, but AMP was the only one accused of board-level interference in a report to a regulator about its efforts to fix the problem.
AMP’s shares tumbled and are trading at just over half their level of a year ago, with the company blaming bad publicity for a reduction in funds under management. The broader Australian market has risen about 5 percent over the same time.
AMP temporarily scrapped executive bonuses and trimmed directors’ fees to win back investor support as it overhauled its leadership.
Along with its pay plans, the company’s new chairman, banking industry veteran David Murray, faces a vote on his re-election at Thursday’s meeting, as do three new directors.
Murray, who joined the company following the revelations of misconduct at the Royal Commission, is likely to face questions about a sale of AMP’s life insurance arm to British Resolution Life for A$1.9 billion ($1.34 billion), a fifth below its book value.
Reporting by Byron Kaye; Editing by Sonali Paul