AMP punishes past executives, defends vertical integration

AMP Limited has confirmed that a number of former executives and board members have already paid a price for the matters raised in the Royal Commission via the forfeiture of long and short-term incentives.

However, it has defended its vertically integrated structure.

In a response to the Royal Commission released to the Australian Securities Exchange (ASX) today, AMP said the royal commission had been a catalyst for change within the company and that it would be working constructively with government, regulators, advisers and trustees to ensure change in the best interests of customers.

It said AMP embraced the need for change and had already taken significant steps to improve culture, governance and accountability including:

• The appointment of David Murray as an independent chair
• The appointment of Francesco De Ferrari as chief executive
• Board renewal
• The appointment of Alex Wade as Group Executive, Advice
• Acceleration of a coordinated advice remediation program
• Appropriate consequence management including forfeiture of long ad short-term incentives for a number of former executives and a reduction in directors fees for 2018.
• Commitment to invest $100 million (pre-tax) over two years to strengthen risk management governance and controls.

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Commenting on the Royal Commission report, AMP chairman, David Murray said it would be a turning point for the industry.

However, he said: “AMP notes that the benefits of vertical integration remain available for customers while acknowledging that conflicts of interest need to be more effectively managed”.

“The proposed regulatory changes will require serious and determined effort to implement but, with the support of industry, should deliver better outcomes for customers,” Murray said.