AMP has moved to secure the services of former Credit Suisse banker Francesco de Ferrari as it looks forward to the new CEO “leading the recovery” out of the intense scrutiny emanating from the current Royal Commission inquiry into widespread misconduct in the financial sector.
De Ferrari was previously with Credit Suisse, where he held the position of Chief Executive of South-East Asia and Frontier Markets. Investors began to demand changes at the top of AMP in response to current regulatory inquests that have shaken the sector in recent weeks.
Details have already been filed with the Australian Stock Exchange (ASX), which show that de Ferrari is set to receive a financial remuneration package worth $8.3m. This has generated some consternation from some opposing sides of the political sphere in Australia.
Peter Whish-Wilson, formerly an investment banker and now Finance Spokesman for the Greens, suggested that the payout on offer for de Ferrari shows that AMP has learned little from what came out of the inquiry. He lamented its short-term approach, saying: “This kind of thing generates righteous anger.”
Chairman of AMP David Murray was more effusive in his praise of the new CEO, hailing his “invaluable” experience in delivering change across many organizations. According to Murray, this experience will allow de Ferrari to “address the significant challenges” that AMP will need to combat. It is currently navigating through a financial market rocked by recent scandals and has a clear need to repair some damage of trust among both citizens and the Australian government.
Murray said that de Ferrari received his compensation package because AMP is ready to “recognize the degree of challenge in the task ahead”. He added that the remuneration was necessary to attract a candidate of de Ferrari’s caliber who would be able to “drive the recovery” of the bank. The salary and incentives made available were therefore “directly aligned with the interests of the shareholders”.
AMP has suffered a clear erosion of trust and confidence after having to apologize for charging a sizable number of customers for services that they never received and not offering the right evidence to the regulators when asked.
This news led to the resignations of key staff, including former chairperson Catherine Brenner and Chief Executive Craig Meller. The threat of a shareholder revolt then led to a shakeup in the boardroom.
De Ferrari leaves Credit Suisse after 17 years and will take up his new post in December. Meanwhile, Credit Suisse has moved quickly to shore up its offices in Asia amid the departure of de Ferrari, with Francois Mommet and Benjamin Cavalli unveiled as Heads of Private Banking in North Asia and South Asia respectively. It is yet to announce any replacement for de Ferrari’s soon-to-be vacant position.
Credit Suisse’s private banking arm in the Asia Pacific posted figures showing growth in its asset management for the first half of 2018, surpassing CHF 200bn ($203.4bn). Meanwhile, its Wealth Management and Connected Division announced pre-tax profits of CHF 464m ($472m).
De Ferrari spoke of his confidence that AMP could quickly rebuild trust in its services while acknowledging that 2018 has “clearly been a challenging year”. AMP shares have struggled to recover since hitting a low point when news of the scandal broke in March of this year.