Shareholders have overwhelmingly voted against executive pay packets at AMP Limited (ASX: AMP). Last week’s annual general meeting saw 67% of shareholders vote against the board’s remuneration report for 2019.

Chief Executive Francesco De Ferrari was paid approximately $4 million in base salary and short-term rewards. Non-executive directors were paid $3.79 million as a group. 

The wealth manager delivered a $2.5 billion loss last financial year and did not pay a final dividend. The AMP share price is down around 35% in the past 12 months and is currently trading for $1.42.

What does the vote mean?

The shareholder vote does not prevent these payments being made, but puts pressure on the board. The ‘two strikes’ rule means a vote on a board spill will be triggered if more than 25% of shareholders vote against two remuneration reports. 

AMP struggles with legacy issues

AMP is still making amends for practices uncovered in the Royal Commission.The wealth manager continues to repay customers for inappropriate advice and for charging customers for advice never received. In its most recent financial year, AMP paid $190 million to clients in misconduct fees. Impairments of $2.35 billion were recorded to address legacy issues.

AMP failed to pay either interim or final dividends last year as its wealth management business sagged. Chairman David Murray told shareholders the decision was disappointing, but in the long-term interests of the company. He  responded to shareholder criticism of executive pay packets by saying the pay reflected the size of the challenge ahead for AMP. 

Business reset 

The wealth manager is undertaking a fundamental reset of its business. Foundational steps in a three-year transformation are underway, but there is much work to be done. CEO De Ferrari said, “2019 was a year of fundamental reset for AMP. We rebased our business, set out a new group strategy, and strengthened our capital base to accelerate the execution of our strategy.”

AMP has shelved the divestment of its New Zealand wealth management operations due to the economic disruption of COVID-19. Offers did not meet expectations, so AMP has decided to retain and grow the business. 

AMP is proceeding with the sale of AMP Life. A deal was struck to sell the business to Resolution Life last year for $3 billion. Payment of the next dividend is dependent on the completion of this sale. Multiple complications have been encountered during the sale process. 

Foolish takeaway

The shareholder strike is an embarrassing blow for AMP. Previous voluntary cuts to fees were not enough to stave off shareholder anger. In April, AMP revealed at least $19.4 billion in outflows in the first 3 months of the year. The wealth manager better hope its transformation strategy brings results. 

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Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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At lunch on Monday the S&P/ASX 200 Index (ASX: XJO) is on course for a strong start to the week. The benchmark index is up 1.2% to 5,454 points at the time of writing.

Here’s what has been happening on the market today:

Big banks push higher.

The big four banks are doing their part today, with three of the four pushing higher on Monday. The best performer in the group is the Westpac Banking Corp (ASX: WBC) share price with a gain of 0.8%. The easing of lockdown restrictions appears to be lifting the banks and the market as a whole today.

Cochlear sales fall 60% in April.

The Cochlear Limited (ASX: COH) share price is pushing higher despite revealing a sharp decline in sales. During the month of April, sales revenue across the Cochlear business fell by ~60% on the prior corresponding period. The sales of cochlear and acoustic implants were the most severely affected. Management also revealed that it is cash flow negative at present, but expects its strong liquidity position to be sufficient to navigate the crisis.

Suncorp updates the market.

The Suncorp Group Ltd (ASX: SUN) share price is charging higher after the release of a trading update. The banking and insurance giant revealed that its insurance business has been both positively and negatively impacted by the pandemic. It has been negatively impacted by landlord loss of rent claims, but positively impacted by lower motor claims. Elsewhere, management notes that the company is currently well capitalised, with capital levels in excess of what is required to cover the expected deterioration due to the pandemic.

Best and worst ASX 200 performers.

The Webjet Limited (ASX: WEB) share price has been the best performer on the ASX 200 today with a 22% gain. Investors appear optimistic that the easing of lockdowns will lead to a recovery in travel bookings. The worst performer has been the Graincorp Ltd (ASX: GNC) share price with a 4% decline. This follows news that China is threatening to slap an 80% import tax on Australian barley.

Returns as of 7/4/2020

James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. The Motley Fool Australia has recommended Cochlear Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More reading

• 3 ASX 200 shares to watch this week
• Why Fisher & Paykel Healthcare, Graincorp, Polynovo, & SEEK are dropping lower
• ASX tourism shares on watch as government flags easing of coronavirus restrictions
• Indonesian market boom for 6 ASX shares
• Where to invest $20,000 into ASX shares for strong long term returns

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