Australian financial group AMP backtracked on the recent promotion of a top executive who was sanctioned for sexual harassment. CEO Francesco De Ferrari is also losing two overseers including a veteran of UBS.
The Sydney-based wealth manager demoted top executive Boe Pahari, effective immediately, it said in a statement on Monday. His is the second abrupt departure from AMP top management under CEO Francesco De Ferrari, who used to run Credit Suisse's private bank in Asia, this month.
The demotion of Pahari, who remains with AMP, is a consequence of massive pressure from AMP's shareholders. The investors also succeeded in ousting Chairman David Murray and John Fraser from AMP's board, immediately. Fraser, a 20-year veteran of UBS and head of its asset management unit until 2013, served on AMP's board for less than two years.
Deeply Troubled Culture
The dispute, two years into De Ferrari's attempted clean-up of the battered firm, undermines his acumen at picking leaders. The CEO (pictured below) three weeks ago lost another key deputy, who had followed him to AMP from Credit Suisse, over another misconduct scandal including sexual harassment.
The matter also raises questions over how effectively De Ferrari can sanitize an apparently deeply troubled AMP culture. De Ferrari's recovery plan for AMP doesn't appear to be objectionable to its biggest investors.
Obstinate Parting Shot
Murray, a 71-year-old businessman who displays both remarkable obstinacy as well as tone-deafness to workplace diversity in a parting shot, is being replaced with Debra Hazleton, a regular board member. She also signaled that De Ferrari's job isn't on the line.
«The board will focus on working with Francesco and his leadership team to deliver long term value for our shareholders and clients by executing the transformation strategy,» Hazleton said. De Ferrari is a so-called clean skin for AMP – he is not an insider in the Aussie financial industry, and he enjoys credibility in the wider Asia-Pacific region from his days at Credit Suisse.
Setbacks Vs Successes
That is key for AMP, which is reeling from a scandal over misleading customers and lying to its regulator as well as bleeding assets. Besides the staffing setbacks, De Ferrari's grueling two first years also included having his three-year, A$17.7 million ($12.7 million) pay scheme docked, also under major criticism.
There have also been successes: As it works its way through a client remediation program set to wrap next year, AMP last week said it swung to a A$203 million profit in the first half, from a A$2.29 billion loss year ago. Last month, De Ferrari was able to wrap a A$3 billion life insurance disposal to Resolution Life, a rival.
