Page 18 of the most recent Challenger annual report revealed Greg Kirk was paid $3 million in bonuses last financial year for his work on the sale of the Genesys dealer group to Axa.
However, according to advisers, he has done nothing, earned nothing for the company and it is the advisers who should be sharing in this payment.
The advisers are apparently so angry that several are seriously considering walking away from their new licensee. They don't feel Axa is a bad mob, but they are angry the deal was done in the way it was.
Dealer group head Andrew Creaser was also rumoured to have been paid between $1.5 million and $2 million for his part in the deal.
It's an interesting dilemma. From Challenger's point of view, the Genesys purchase was a bit of a lemon. A number of key adviser and member groups quit the dealership last November after their shares in Challenger were released from escrow on August 22.
Another potential blow was recently stopped by an injunction won by Genesys after former employee Ray Miles began soliciting Genesys member firms to join his proposed new dealer group.
However, the dissatisfaction of the advisers has added to the general dissatisfaction with Challenger from shareholders.
The value has dropped more than 50 per cent since the beginning of the year.
Challenger has been disappointing, with Jamie Packer being one of the remaining draws to the company.
Morningstar analysts have said that while upside may remain in the company, it is not for the conservative investor. They have a huge clean-up job ahead of them to restore investor confidence.
Axa's purchase will be watched with interest.
The industry is still ripe for consolidation and I'm sure the next 12 months will see action in that area.
