Ann: AMP Life sale and interim dividend update, page-38

AMP chief's incentive targets more unattainable by the week

AMP's newish chief Francesco De Ferrari, whose incentive package keeps shrinking in value. Alas, in the period between the announcement and commencement of De Ferrari's appointment (interim CEO Mike Wilkins is now back where he started as a non-executive director of AMP), the Resolution Life deal was announced, at a value far below what many in the market had been expecting. Many shareholders were unimpressed and voted with their feet, pushing De Ferrari's equity incentive payments further out of reach. When last we nutted it out in November, just before he started, the share price was $2.52, meaning he had to secure a 78 per cent share price rise.

And would you know it, things are now even worse. With the share price down 46.3 per cent since De Ferrari's appointment less than a year ago and 15.8 per cent since news of the Kiwi difficulties hit the market, De Ferrari's incentive share allocations are, at this point, likely to remain entirely mythical.And sure, some of his incentive equity payments he'll accrue for mere longevity. But the value of the 1.4 million shares he'll get merely for sticking around until August 2021 has halved.If De Ferrari can, in less than two years, more than double the share price (which closed on Monday at $1.81), we reckon he'll have earned every penny. Though it hardly seems fair that, largely based on the failure of a deal that pre-dates him, his incentive hurdles are all but unattainable.

Surely the poor man's incentives deserve rebasement? Though, it's not like AMP's long-suffering shareholders — on Monday down a dividend — have that option ...