Why the AMP share price surged on Thursday
The AMP share price rose firmly on Thursday after the company revealed that Francesco De Ferrari would be stepping down from his role as CEO.
- AMP reveals new CEO
- The company's stock surges in response to this leadership shakeup
- Private markets business sale remains ongoing
- Trade stocks like AMP, long and short, with IG now.
Following significant media speculation last week, AMP Ltd (ticker: AMP) on Thursday officially announced that its current CEO – Francesco De Ferrari – would be stepping down from his role.
This comes after the beleaguered wealth management firm spent much of last week denying rumours of its CEO’s resignation. On March 25, the firm said:
'AMP Limited notes the media reports today and confirms that Francesco De Ferrari remains as Chief Executive Officer of the group.'
And then again on March 26, the firm said:
‘AMP confirms there has been no change to the CEO's position and that MR De Ferrari has not resigned.'
However this time, AMP added that the Board and Mr Ferrari were 'constructively discussing the future strategy and leadership of the group.'
This constructive discussion has apparently resulted in Mr Ferrari’s retirement.
In his place, Alexis George is set to take up the reigns as the new group CEO. Ms George previously worked at ANZ, most recently holding the role of Deputy Chief Executive Officer. Before that, she spent a decade at ING and is also a member of the Institute of Charted Accountants.
Including super, Ms George is expected to net an annual salary of $1.715 million, in addition to a number of other perks, including a sign-on equity focused award valued at $4.091 million
She is set to take on the CEO role in the fourth quarter of 2021, assuming no regulatory issues arise.
AMP share price ↑
The AMP share price was up significantly on this news, rising 5.14% to $1.33 per share by 12:41PM.
This takes us to our next point.
Between the handover, Mr Ferrari will continue to lead AMP. In particular, he will continue to work closely with the Board on a number of the firm's key strategic priorities, including the potential sale of AMP’s private markets business to Ares Management.
That sale has been a key point of interest to the market in recent months, as the two companies grapple with amenable terms of a possible sale.
In late February, AMP announced it had entered into a non-binding agreement to sell a 60% stake in its private markets business to Ares. Under the joint venture AMP would retain 40% of the business.
'AMP and Ares will enter into a 30-day period of exclusivity, to work towards a binding transaction.'
On Monday, AMP told the market that the period of exclusivity had ended, but that the companies were still working towards a potential deal.
'Ares has expressed interest in acquiring 100 per cent of the private markets businesses,’ the company flagged, a material departure from the joint venture partnership described in late February.
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