Clock Ticks on AMP CEO De Ferrari as Board Weighs New Leadership
(Bloomberg) -- The chaotic restructure of Australia’s oldest wealth manager, AMP Ltd, continues, with the clock now ticking on the leadership of Chief Executive Officer Francesco De Ferrari.
De Ferrari, who has presided over the company as it lurched from crisis to scandal over the past couple of years, has been discussing his future with the company’s board, led by Debra Hazelton. The talks are focused on transitioning to new leadership once the company has resolved the sale of a number of assets now on the block, according to people with knowledge of the matter.
The board has already spent some time weighing the best options for what it expects will soon be a slimmed-down company, the people said, asking not to be identified as the deliberations are private. The company’s shares have dropped more than 40% during De Ferrari’s tumultuous tenure, which saw sexual harassment allegations involving senior executives raise questions about his leadership.
“The Board and Mr De Ferrari are working together and constructively discussing the future strategy and leadership of the group, post the completion of AMP’s portfolio review,” AMP said in a statement Friday. “These discussions are ongoing and AMP will provide updates as required.”
The statement came after the company paused its trading on Thursday on a report in The Australian Financial Review that the CEO would resign that day. An AMP spokesperson declined to comment beyond the statement.
AMP shares were up 0.9% at A$1.345 as of 3:08 p.m. in Sydney Friday, having lost 3.8% Thursday prior to their suspension at around 3:30 p.m. local time pending a company announcement.
AMP is in the process of selling a number of assets, including parts of its most valuable business, AMP Capital. AMP is in discussions with U.S. asset manager Ares Management Corp. over a $1.1 billion deal for control of the infrastructure and real estate assets in that unit. It’s also trying to offload its equities and fixed income business and has shifted some of its public markets businesses out of AMP Capital into its Australian division.
AMP Australia, led by Scott Hartley and comprising of banking and wealth management, will be what remains after the asset sales.
Investors, who have endured a torrid three years with two boardroom shakeups and revelations the company charged fees to clients for services they didn’t receive, and then lied to regulators about the wrongdoing, are running out of patience.
AMP has “some very good parts” to the business and has made progress toward a sustainable future, said Simon Mawhinney, chief investment officer at Allan Gray Australia Pty., the firm’s second-largest shareholder. But there’s more work to be done, he said.
“There’s no time to waste,” he said. “Whatever happens, it must not be destabilizing and needs to be executed with rigor and without delay.”
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