AMP shares rose 0.5% or two cents yesterday to $4.014 after the chairmen, Catherine Brenner departed, along with the company’s chief legal counsel, Brian Salter.
It wasn’t a convincing rise as events on the AMP board are starting resemble a Russian folk story. The chair departs, following the chief lawyer who both follow the CEO out the door, while three more directors are threatened with ejection at AMP’s annual meeting in Melbourne on Thursday week.
One enduring folk tale from Russia is about a troika (a three horse sleigh) being chased over the steppes by a pack of wolves and the people in the sleigh start throwing occupants off the sleigh to the wolves in an attempt to lighten the load and survive.
You can’t help noticing similarities between that and the AMP’s struggles to avoid criminal prosecution at the hands of the Hayne Royal Commission.
Preceding them CEO, Craig Meller, an easy sacrifice and first out of the sleigh, seeing he had already started his exit from the top job later this year.
At the same time, General Counsel, Brian Salter was forced to balance on the back of the troika pending another attack by the wolves, which came on Friday when Rowena Orr QC recommended criminal charges be laid against the AMP she told commissioner, Ken Hayne on Friday, that it is open to find that AMP breached the Corporations Act by making “material” and “deliberate” attempts to mislead ASIC about the “extent and nature” of the ongoing fee for no service conduct. In her closing address for this second round of hearings for the Commission,
Ms Orr recommended that AMP be charged for breaching Section 64 of the ASIC Act, which is a criminal offence.
And in yesterday’s statement a small bone was tossed to the wolves – the remaining board members (and presumably any new additions) will be paid 25% less for this year. Presumably their pay will revert back to current rates?
That is hardly punishment – their pay will fall by around $80,000 to just over $100,000 for the rest of this year- they will still get more than a quarter of a million dollars each. A realistic penalty would be no payment for the year!
You can read the desperation of those remaining around the AMP board table to survive the worst possible thing for a major Australian company – a criminal conviction would would stay forever and stain the company. Acting executive chair, Mike Wilkins (https://corporate.amp.com.au/shareholder-centre/results-reporting/asx-announcements).
"The Board has received advice from Philip Crutchfield QC, Tamieka Spencer Bruce of Counsel, and Tim Bednall of King & Wood Mallesons in relation to certain issues raised in the Royal Commission concerning the preparation of the Clayton Utz report on AMP’s fee for no service issue. As we recently announced, the Board established a Committee, that I chair, to examine issues in the Australian advice business raised during the Royal Commission.
"Having considered and assessed the matters, the Board is satisfied that Catherine Brenner, former Chief Executive Officer Craig Meller and the other directors did not act inappropriately in relation to the preparation of the Clayton Utz report.
"The Board recognises collective governance accountability for the issues in the Australian advice business. As such, fees for all AMP Limited Directors will be reduced by 25 per cent for the remainder of the 2018 calendar year.
"AMP respects the Royal Commission process. I can assure you that the evidence and submissions presented by Counsel Assisting are being treated extremely seriously by the Board. Appropriate steps are being taken to address the issues raised and remediating our customers is being given utmost priority.
“AMP will be making a formal submission to the Royal Commission by Friday 4 May in response to the matters raised in closing submissions by Counsel Assisting the Royal Commission."
So the so-called independent report from Clayton Utz, which was interfered with 25 times by AMP people, including Ms Brenner and Mr Salter, has been found to be OK.
That report was supposed to be independent, the Royal Commission evidence has challenged that idea, now the AMP board says that its inquiry has found that “Catherine Brenner, former Chief Executive Officer Craig Meller and the other directors did not act inappropriately in relation to the preparation of the Clayton Utz report. “
Seeing Mr Salter isn’t a director, he is being blamed by omission in Mr Wilkins’ statement today. Mr Salter has been doubly thrown to the wolves to try and save the company and especially the board.
