By Stuart Washington
THE chief executive of AXA Asia Pacific, Andrew Penn, will receive a $17 million payout in the merger with AMP, making him Australia's highest-paid financial services CEO.
The payment is a swansong to Mr Penn's 20-year career with AXA. He will receive $8 million in options payouts and a $9 million termination payout under a merger that will create Australia's largest non-bank manager of superannuation.
The combined payout, which includes benefits and options built over his time with AXA, would give Mr Penn a higher pay than the $16 million received by the Commonwealth Bank CEO, Ralph Norris, last year.
AMP's $14.6 billion joint bid to buy the wealth manager was yesterday judged fair and reasonable by an independent expert, Grant Samuel.
AXA shareholders are due to vote on the merger and Mr Penn's termination payment on March 2, after AMP succeeded with AXA's French parent, AXA SA, in a protracted takeover campaign.
On completion the merged entity will be the biggest non-bank wealth manager in the country with $133 billion under management.
Mr Penn's termination payment will be voted on by shareholders following the introduction of new laws that make a vote mandatory if a termination payment is more than one year's base pay.
Last year Mr Penn received remuneration of $3.6 million.
Controversies surrounding termination payouts include the $8.4 million payout to the former Oxiana CEO Owen Hegarty and the $15.5 million payout to the former Publishing & Broadcasting Ltd executive John Alexander.
The loss of AXA's high-growth Asian businesses, which will be carved off by AXA SA, was among the risks highlighted for AXA's shareholders.
AXA shareholders were also warned of a host of risks they faced in the merged business.
But Mr Samuel said investors being offered $6.43 a share, which includes AMP shares and cash, were being fairly paid for the business, which he valued at between $6.03 and $6.64. The cash amount in the offer will vary depending on the change in the price of AMP shares, but will guarantee investors receive $6.43 in value if AMP shares trade between $4.50 and $5.60.
The explanatory memorandum from AXA's independent directors recommended shareholders vote for the scheme.
In a letter, AMP's chairman, Peter Mason, wrote: ''We believe this proposal presents you with a compelling offer, and the opportunity to participate in a strong, market leading merged company.''