'Step one': More action needed from AMP, say major investors

Prime Minister Malcolm Turnbull said Ms Brenner's departure was the right decision and that "those who have done the wrong thing should be held to account".

Deputy Opposition Leader Tanya Plibersek also said Ms Brenner's leaving was "something that needed to happen".

Labor would allow the royal commission to play out and then introduce systemic reforms rather than let "just one or two people to fall on their swords". It was important that people behaving unethically "face the full force of the law", but Ms Plibersek said this wasn't just about a few bad apples.

Phi Finney McDonald director, Tim Finney said AMP’s conduct, possibly criminal in nature, was "the worst of a bad bunch”.

The class action would be open to all shareholders, he said, and would seek compensation for investors who acquired shares in AMP between May 24 2013 and April 13 2018.

“It is all very well for AMP to say that it ‘unreservedly’ apologises to the regulator, but where does that leave investors in AMP shares who have seen billions of dollars wiped off AMP’s market capitalisation in the last two weeks?”, Mr Finney said.

The group representing Australia's largest superannuation funds, the Australian Council of Superannuation Investors, said $12 billion of investor capital was at stake.

ACSI chief executive Louise Davidson said the resignation of Ms Brenner was a "belated gesture" of board accountability and that "more is needed". This included actions such as more directors and executives standing down and the board clawing back bonuses that had been paid to executives found to be involved in misconduct.

"Investors need reassurance that the poor culture and governance practices exposed at the royal commission have been banished and new perspectives installed," she said.

More is needed, says ACSI's Louise Davidson
Photo: Josh Robenstone

The managing director of AMP shareholder Argo Investments, Jason Beddow, said the action announced by AMP was "step one" of "many steps" that would be needed at the wealth giant.

Argo was the 10th-largest shareholder in AMP, according to its latest annual report, with about $50 million in shares in the wealth manager.

"I think that, considering what had happened, to not have board changes would have been untenable," Mr Beddow said.

ACSI will be voting against the re-election of three of the company's directors - Holly Kramer, Vanessa Wallace and Andrew Harmos. The Australian Shareholder Association will also use its proxy voting power to vote against Ms Kramer and Ms Wallace, but was still considering its position on Mr Harmos, who joined the board in June 2017.

AMP chairman Catherine Brenner has stepped down.

"The chairman stepping down is a positive move forward," ASA's Allan Goldin said. "But as the boardroom has said, there's collective responsibility. If we believe there's collective responsibility, that means we will also be voting against Mike Wilkins when he comes up for re-election."

Mr Goldin said that in the interim there shouldn't be a total board wipe-out as this would be "too destabilising". "It should happen over the next few years - we believe that it was not just Catherine Brenner - she [was] chairman and has ultimate responsibility, but she wasn't there by herself," he said.

AMP on Monday also announced the board would reduce its director fees by 25 per cent for the remainder of 2018. Mr Goldin said that off base pay that was about $50,000 each, and a one-off penalty was not enough. "Collective responsibility doesn't mean, 'we will grab money off you one year and everything is sweet'," he said. "Sorry, but if you haven't behaved properly it shouldn't just be a slap on the hand."

Both the ACSI and ASA have said they will vote against AMP’s remuneration report, as it was too generous and still rewarded executives based on short-term outcomes. "We're looking for investing in a company that's going to look at the future," Mr Goldin said. "We're not day traders; we're not looking to see how much profit you've made today because you've cut some corners."

Mr Goldin said he hoped more of AMP's 740,000 retail shareholders would show up to the company's AGM on May 10 to express their discontent after the royal commission exposed shocking examples of "fees for no service" by some AMP advisers.

Ms Davidson said while ACSI welcomed the board reducing its fees and cancelling the outstanding deferred remuneration of group general counsel and company secretary Brian Salter, "we would expect to see more executives experience financial consequences as these issues are investigated". “There is a link between what has gone wrong at AMP and remuneration practices," she said.

Tony Shepherd, former president of the Business Council of Australia, said the the events at AMP showed boards, elected by shareholders, are accountable to them. "Recent events demonstrate that accountability," he said. "Of course when a company is going well management are heroes. When things don’t go so well it’s all the board’s fault."