Remuneration

In considering the 2019 short-term incentives the board has sought to balance the need to exercise some restraint to reflect our shareholders’ experience, but at the same time be able to attract and retain the right people to work through the complexities in the business.
Overview of 2019

In 2019, AMP committed to a significant transformation of its business, setting out a new strategy as well as changes to its operating model. The leaders and wider employee base took on the challenge of reshaping the business, including managing the complex separation of AMP’s life insurance business and addressing the long-term legacy issues in financial advice and superannuation. This had to be conducted in an environment of rapid regulatory change.

Our CEO Francesco De Ferrari led the development of the new strategy and implemented required changes in the business in his first full year with the company. The CEO has reshaped and streamlined his leadership team, articulated a new corporate purpose, and established the new operating model. The board has established systems of oversight to track its progress of the strategy.

Following the challenges the company faced in 2018, and associated loss of shareholder value, our senior executives understood and accepted the board’s decision not to award short-term incentive payments for that year.

For 2019, the board has been cognisant that the renegotiation of the AMP Life sale, the new capital issuance, and ongoing complexity, again adversely affected the company’s share price. Accordingly, in considering the 2019 short-term incentives the board has sought to balance the need to exercise some restraint to reflect our shareholders’ experience, but at the same time be able to attract and retain the right people to work through the complexities in the business.

Conduct and culture

Improving the conduct and culture within the business forms a core element of AMP’s transformation. The board seeks to set the tone by requiring management to address legacy issues by establishing robust processes around risk management, governance, reporting and people systems.

Together, these systems are intended to build a culture which reflects the company purpose and its underlying principles, with its focus on meeting our customers’ needs and helping them to realise their broader ambitions in life.

Important steps have also been taken in articulating expected behaviours and embedding them within our performance management, remuneration and employee recognition systems. These behaviours are reinforced by our employee conduct management policy and guidelines.

A major investment to enhance our risk management, internal controls and governance was outlined to shareholders in 2018. This has included putting in place new mechanisms to identify risks, ensure they are properly managed and reported, and reinforce necessary practices within the business.

The board has been deliberate in ensuring conduct and culture of the organisation, including risk outcomes, are taken into account in remuneration outcomes. As AMP continues its transformation, the board will continue to exercise discretion to ensure there are remuneration consequences applied where warranted.

2019 performance and remuneration

The board’s role is to ensure remuneration outcomes have appropriately considered financial returns to shareholders while balancing longer-term non-financial measures such as delivery against strategic priorities, risk management (including people risks), customer outcomes, individual behaviours and culture.

The company’s remuneration approach recognises areas of strong performance where teams and individuals have delivered and outperformed against their targets. The board is aware of the challenges implicit in the transformation and delivery of the strategic plan and that this is dependent on attracting and retaining skilled people.

The board awarded 2019 outcomes for the CEO and executives taking into account the need to appropriately motivate and retain executives while ensuring alignment with stakeholder outcomes and exercising restraint. 2019 STI outcomes ranged between 0% and 63% of maximum opportunity, illustrating differentiation for factors such as business unit and individual performance including risk management, conduct and behaviours.

Changes to the remuneration structure for 2019

For 2019, the Remuneration Committee refreshed the group incentive structures to support the new strategy through:

  • the development of the 2019 group incentive pool based on the achievement of financial outcomes and a set of key priorities. This departure from the scorecard approach used in prior years provides the board with flexibility and discretion to react to rapidly shifting strategic priorities as needed to deliver long-term shareholder value;
  • introduction of a new long-term incentive plan for executives and senior leaders. The plan includes a Risk and Conduct Gateway to ensure the board’s expectations of an individual’s performance are met before vesting can occur; and
  • senior leaders moving to an STI and LTI structure in support of our objective to differentiate reward outcomes for our best performers.
Committee priorities for 2020

The priorities for 2020 include:

  • responding to changes in the regulation of executive remuneration;
  • embedding the new conduct management policy and guidelines, which address inappropriate conduct and recognise behaviours that are consistent with AMP values; and
  • monitoring of the remuneration framework and its consistency with AMP’s transformation.

The board appreciates the feedback we have received from our shareholders and clients and will continue to engage as the company delivers on its transformation strategy.

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David Murray AO – Chairman, AMP Limited Board and AMP Remuneration Committee
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Board remuneration

The following table shows the remuneration paid to AMP Limited Non-executive Directors for 2019.

Name Appointed to
the AMP Board
Year Total fees
and benefits1
$’000
Super-
annuation
$’000
Total
$’000
AMP
shares
held 3
David Murray
Chairman
June 2018 2019
2018
831
438
19
11
850
449
291,375
John Fraser
Non-executive Director
September 2018 2019
2018
345
50
24
6
369
56
21,875
Andrew Harmos
Non-executive Director
June 2017 2019
2018
392
281
24
20
416
301
36,818
Debra Hazelton
Non-executive Director
June 2019 2019
2018
232
19
251
102,877
Trevor Matthews
Non-executive Director
March 2014 2019
2018
427
304
24
20
451
324
100,000
John O'Sullivan
Non-executive Director
June 2018 2019
2018
287
101
24
11
311
112
54,086
Andrea Slattery
Non-executive Director
February 2019 2019
2018
312
22
334
58,475
Peter Varghese
Non-executive Director
October 2016 2019
2018
364
292
24
20
388
312
85,575
Name Retired Year Total
fees and
benefits1
$’000
Super-
annuation
$’000
Total
$’000
AMP
shares
held3
Former directors            
Geoff Roberts
Former Non-executive
Director
May 2019 2019
2018
125
255
9
20
134
275
n/a
Mike Wilkins
Former Non-executive
Director
February 2020 2019
2018
355
1,497
22
19
377
1,5162
108,525
Executive remuneration

The following table shows the remuneration paid to the AMP executive team for 2019.

Name and position Year Cash
salary
$’000
Cash
incentives
$’000
Other short-term
benefits
$’000
Super-
annuation
$’000
Rights,
options and
restricted shares
$’000
Other
$’000
Total
$’000
Francesco De Ferrari
Chief Executive Officer
2019
2018
2,177
156
1,320
1,711
341
22
5
8,196
774
5
13,431
1,276
Megan Beer
Chief Executive, AMP Life
2019
2018
860
861
225
56
45
25
25
641
618
13
9
1,820
1,558
David Cullen
Group General Counsel
2019
2018
668
426
260
8
29
25
15
531
45
13
88
1,505
603
Jenny Fagg
Chief Risk Officer
2019
2018
877
797
200
43
159
22
57
283
330
2
2
1,427
1,345
James Georgeson
Chief Financial Officer
2019
2018
182
78
1
7
115
3
386
Helen Livesey
Group Executive, People and Corporate Affairs
2019
2018
802
666
280
16
55
22
22
617
507
17
8
1,754
1,258
Craig Ryman
Chief Operating Officer
2019
2018
846
755
200
43
54
25
25
552
575
40
52
1,706
1,461
Adam Tindall
Chief Executive, AMP Capital
2019
2018
878
853
1,442
785
30
41
25
25
1,090
1,272
658
333
4,123
3,309
Alex Wade
Chief Executive, AMP Australia
2019
2018
909
400
581
39
1,051
1
2,981
Name and position Year Cash
salary
$’000
Cash
incentives
$’000
Other short-term
benefits
$’000
Super-
annuation
$’000
Rights,
options and
restricted shares
$’000
Other
$’0001
Total
$’000
Former executives                
Sally Bruce
Former Group Executive, AMP Bank
2019
2018
655
725
165
222
232
23
25
623
526
408
5
2,096
1,513
Gordon Lefevre
Former Chief Financial Officer
2019
2018
684
939
150
70
121
22
22
582
790
941
10
2,449
1,882
Paul Sainsbury
Former Group Executive, Wealth Solutions and Customer
2019
2018
129
897

81
35
24
25
(80)
778
1,815
(26)
1,969
1,709
Fiona Wardlaw
Former Group Executive, People and Culture
2019
2018
298
757

31
43
18
25
556
538
1,198
29
2,101
1,392
2020 AMP AGM
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