AMP gets fired up on bosses pay
AMP, which has $126 billion under management, revealed its voting patterns for the past year, naming and shaming outliers, in its corporate governance report released on Tuesday.
After its initial scepticism about the Labor government's introduction of the two-strike rule, due to its potential to "create unnecessary distraction and unintended consequences", the fund manager has since backed the move.
It believes the two-strike vote encouraged broader scrutiny of executive pay, where previously its protests "often fell on deaf ears".
"This AGM season, we've seen a dramatic increase in the number of companies seeking to engage with us," said AMP Capital's head of sustainable funds, Ian Woods.
"This has provided an opportunity to not only get a greater insight into a company's priorities through more transparent remuneration structures, but also to raise other important issues."
Despite holding stakes in 20 companies facing a potentially disruptive second strike, AMP chose to vote only against taxi industry giant Cabcharge, contractor UGL and miners Cudeco and Linc.
It said they paid discretionary bonuses which appeared at odds with company performance, and that executive pay was too high for companies of the size.
Cabcharge was hit with a 38 per cent protest vote against its remuneration report, triggering a vote to spill the board. But shareholders overwhelmingly voted against the resolution, with more than 86 per cent voting it down.
Even so, Reg Kermode, long-time chief executive and chairman of Cabcharge, has labelled the two-strike system "not democratic" and against the interests of Australian business.
Likewise Linc Energy escaped a spill even after shareholders' 40 per cent protest vote at its annual meeting. Copper miner Cudeco and UGL both avoided a second-strike vote.
AMP revealed it also voted against the re-election of unnamed directors of 10 companies, including media giant News Corp and retail group Harvey Norman.
Of 20 companies in AMP Capital's portfolio facing a potential second strike only Cabcharge and Linc had one - but neither faced a board spill vote due to lack of support for the motion.
Dr Woods says the increased engagement is an important part of being an active shareholder. He also drew a link between well-structured remuneration, corporate performance and shareholder interests.
Last year, AMP Capital voted on 1734 resolutions at 332 company meetings, voting against 7 per cent. It voted against 25 remuneration reports, including Macmahon Holdings, News Corp and Nufarm.
The AMP Capital report also showed an improvement in gender diversity on boards. It found the proportion of boards without women directors had fallen from 60 per cent in 2010 to 39 per cent.
"There has been clear evidence that progress has been made with regard to increasing the gender diversity of listed company boards of directors," Dr Woods said.
AMP Capital issues a ‘‘second strike’’ against:
Cabcharge
Cudeco
Linc Energy
UGL
And voted against a director in:
News Corp
Harvey Norman
Cabcharg
Frequently Asked Questions about this Article…
AMP Capital, which manages about $126 billion, published a corporate governance report outlining its voting patterns over the year. It named companies where it opposed excessive executive pay, revealed it voted on 1,734 resolutions at 332 company meetings, voted against 7% of resolutions, and opposed 25 remuneration reports including at companies such as Macmahon, News Corp and Nufarm.
The 'two‑strike' rule lets shareholders trigger stronger action — including a potential board spill — if a company receives repeated protest votes on its remuneration report. AMP Capital was initially sceptical that the rule might create distractions, but it has since backed the measure, saying it encourages broader scrutiny of executive pay and increases company engagement with investors.
AMP Capital issued a 'second strike' — signalling a formal protest over remuneration — against four companies named in its report: Cabcharge, Cudeco, Linc Energy and UGL, citing discretionary bonuses that appeared inconsistent with company performance or pay levels that were high for the company's size.
Cabcharge received a 38% protest vote against its remuneration report, which triggered a vote to spill the board. However, the spill motion was overwhelmingly defeated by shareholders, with more than 86% voting against the spill. Cabcharge's long‑time CEO and chairman Reg Kermode criticised the two‑strike system as 'not democratic.'
AMP Capital said it voted against the re‑election of unnamed directors at 10 companies when it judged that remuneration structures or governance fell short. The report specifically notes votes against directors at companies including News Corp and Harvey Norman — part of AMP's broader approach of active engagement when pay and performance do not align with shareholder interests.
AMP Capital argues that well‑structured remuneration is linked to corporate performance and shareholder interests. The fund’s increased engagement with companies during AGM season, it says, provides greater transparency on pay arrangements and allows investors to raise other important governance issues.
AMP Capital's activity — voting on 1,734 resolutions at 332 meetings and opposing around 7% of resolutions — shows large institutional investors can influence corporate governance by using votes, public reporting and engagement. For everyday investors, it highlights that shareholder votes, remuneration report protests and active engagement are tools investors use to hold boards and executives to account.
Yes. AMP Capital's report found progress on gender diversity: the share of listed company boards without any women directors fell from 60% in 2010 to 39% in the report year, an improvement AMP describes as clear evidence of progress in increasing board gender diversity.
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