Storm of abuse for AMP
January 18, 2008
This Mirinda McLachlan story appeared in The Herald Sun on May 19, 2000, after AMP AGM in Melbourne.
AMP was forced to face the music yesterday – deflecting a hailstorm of shareholder abuse at its annual meeting in Melbourne.
Shareholders were hopping mad over the board's inability to foresee GIO's $1 billion reinsurance disaster.
"A board of dictators, dopes and donkeys'' was how one shareholder described directors.
He slammed director and risk management expert Carolyn Hewson for not stopping the bid, describing directors as "obsolete intellectual equipment''.
Chairman Stan Wallis conceded that the company had made a crucial judgment error and was forced to apologise.
"GIO is unfortunate. I apologise. We are sorry it happened but these things happen in business,'' Mr Wallis said.
"GIO was not about failure of corporate governance . . . this was about a mistake of judgment.''
But Mr Wallis hastened to add that it was "not the biggest corporate investment error'' and that the "value is coming back into GIO week by week''.
The bid was based solely on generally available information, he said, inferring that GIO's disclosure had been substandard.
Yet, when criticised for not seeking alternative ways of obtaining information, he responded that AMP had been "surrounded by information experts''.
With the AMP share price languishing below $15, the board came under constant fire over its knock-back of National Australia Bank's $21 a share bid.
"Is there anyone here today who wouldn't take $21 a share?'' one shareholder asked.
A resolution to grant Mr Batchelor 1.28 million options at an exercise price of $15.933 also caused outrage, given the NAB knock-back, but easily got the green light.
And many shareholders demanded to know why the board had handed over $13 million in a payout to former chief George Trumbull without a fight.
Mr Trumbull led the charge in the ill-fated offensive on GIO which has cost the company so dearly.
Defending Mr Trumbull's high payout, Mr Wallis responded with: "You get what you pay for in this world.''
This made many in the 1000-strong audience giggle considering the damage the high-flying executive had inflicted.
Mr Wallis defended the choice of former chief financial officer Paul Batchelor to run AMP, given his involvement in the hostile GIO takeover.
"Mr Batchelor has the full support of myself and my colleagues on the board.''
A reshuffle of the board would continue with further appointments to be made over the next few months, Mr Wallis said.
There had already been an external review of the board, he said.
Even the Australian Conservation Foundation had a dig at the company over the land clearing practices of its Stanbroke Pastoral Company investment.
Many shareholders threw their support behind former business journalist Stephen Mayne's bid for a directorship, calling for young blood to be injected into the board.
Mr Mayne's bid failed because he did not have the board's backing and therefore that of most of the big institutional investors.
But he did manage to collect nearly 70 million votes supporting his crusade while many others abstained on his nomination.
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