Powered by momentummedia
nestegg logo
Powered by momentummedia
Powered by momentummedia
nestegg logo
nestegg logo

 

 

Invest

No dividend, no worries for AMP CEO salary

  • February 13 2020
  • Share

Invest

No dividend, no worries for AMP CEO salary

By Grace Ormsby
February 13 2020

An almost $200 million hit to company profits and a declaration that there will be no shareholder dividends for 2019 haven’t been enough to prevent AMP’s CEO from potentially taking home a pay packet that’s double his base salary in 2020.

Francesco De Ferrari

No dividend, no worries for AMP CEO salary

author image
  • February 13 2020
  • Share

An almost $200 million hit to company profits and a declaration that there will be no shareholder dividends for 2019 haven’t been enough to prevent AMP’s CEO from potentially taking home a pay packet that’s double his base salary in 2020.

Francesco De Ferrari

The wealth giant’s board has confirmed an “adjustment” to CEO Francesco De Ferrari’s remuneration terms, which will boost his short-term incentive opportunity to 200 per cent of his base salary – replacing the maximum short-term incentive opportunity of 120 per cent of his base salary.

Mr De Ferrari was appointed with a base salary of $2.2 million back in August 2018.

According to AMP, the change will only apply to the maximum short-term incentive opportunity achievable if all targets set for the CEO are exceeded.

When questioned by media about the potential for him to take home an even bigger slice of the pie, Mr De Ferrari outlined that his remuneration is set by the board “and is a matter for the board”.

Advertisement
Advertisement

“Our bonuses are discretionary.”

Emphasising that the announcement regarding the remuneration update was around “the maximum opportunity”, the CEO conceded: “I suppose if I don’t perform, I don’t get paid.”

“I’m really focused on delivering the three-year plan that I came here to deliver,” he added.

“And so Im really driven and passionate by the purpose and delivering the strategy.”

Mr De Ferrari was speaking about the “three-year transformation” that is currently being undertaken by AMP.

Noting 2019 as a “fundamental reset”, the CEO said the wealth giant had rebased its business, set out a new group strategy and strengthened its capital base to accelerate the execution of its strategy.

“In a period of unprecedented legislative and regulatory pressure, we have established a strong three-year roadmap for recovery. Our focus is now on delivery,” he offered.

Across its entire suite of business units, AMP recorded a 25 per cent hit to profits in the 2019 financial year.

Most notable was a 50 per cent hit to operational earnings by its Australian wealth management business – from $363 million in 2018 to just $182 million in 2019.

AMP Bank and New Zealand wealth management also recorded lower earnings: AMP Bank saw a 4.7 per cent drop from $148 million in 2018 to $141 million in 2019, while New Zealand wealth management reported a 17 per cent drop in operational earnings from $53 million to $44 million.

AMP Capital managed to buck the trend, boosting its operating earnings by almost 20 per cent in 2019 compared with 2018 – pulling in $198 million in 2019 compared with 2018’s $167 million.

The losses have flowed through to AMP’s ultimate capital positioning in the market and led the board to make the decision to not declare a final dividend for shareholders.

Its official positioning, as outlined by the report, was this: “To maintain balance sheet strength and prudent capital management through a period of significant change, the board has resolved not to declare a final dividend in FY19.”

The report did concede that this position would be reviewed after the completion of the AMP Life sale.

No dividend, no worries for AMP CEO salary
Francesco De Ferrari
nestegg logo

Forward this article to a friend. Follow us on Linkedin. Join us on Facebook. Find us on Twitter for the latest updates
Rate the article

About the author

author image

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

About the author

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

more on this topic

more on this topic

From the web

Recommended by Spike Native Network

More articles

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.