If there's one thing shareholders hate, it's seeing leadership dish out big dollars while the company underperforms. AMP Ltd (ASX: AMP) has been in the firing line for this very issue for years, with today's annual general meeting (AGM) bringing it front and centre.
At the time of writing, the AMP share price is 2% lower to $1.11 a share.
Aside from discussing turnaround plans, the main focus of the AGM was whether the remuneration report would pass on shareholder's votes.
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A win for AMP, kind of
We reported on the potential for AMP to face a shareholder revolt earlier in the week. As the AMP share price continues to decline on less-than-optimal performance, the Australian Shareholders' Association (ASA), along with other proxies and shareholders, looked to vote against the remuneration report.
The reason for a no vote is centred around the lack of long-term incentives. Only 25% of the proposed payments were built around longer-term milestones. On top of that, there was pushback on retention-based schemes that essentially involve paying leadership just for 'showing up'.
Now, that might float the boat for companies that have been delivering exceptional performance, but AMP doesn't fit that description in the minds of many shareholders. Hence, the expectation was that the 25% vote against had a high chance of being hit. Which would have meant further modifications to the report.
Luckily (arguably unlucky for some) the no vote narrowly missed the 25% required, at 23.82%. That means the remuneration will stay as it is, allowing leadership to collect their retention awards.
The vote is a win for AMP in a way, enabling it to avoid the embarrassment of receiving a second strike. However, it does little to rebuild the relationship between shareholders and the company.
AMP looking for a share price reprieve
AMP is no doubt hoping for better things to come under the guide of chair Debra Hazelton and new CEO Alexis George. The disrupted incumbent is undertaking a major transformation to reinvigorate what was once a beaming financial services business.
However, as Hazelton states, "Transformations of this scale are difficult. They take time to get right, and it is often hard to see progress in the earlier stages."
Progress is exactly what AMP shareholders will be looking for in the near future. From some of the questions in the AGM, it's not hard to tell some are nearing the end of their patience. Considering the 72% AMP share price erosion in the last 3 years, it's not hard to see why.
