Even as he tries to restructure the battered but still powerful AMP, CEO Andrew Mohl is also having to defend the $38 million of retention payments the group is handing out to keep key staff once the demerger of its UK operations is complete.

With rumours bouncing around about the possibility of Westpac making a bid for AMP – its arch-rival ANZ is now larger following its acquisition of the National Bank of NZ – Mr Mohl had to deal with a flurry of questions about the payments from institutional investors and analysts at a special briefing last week.

According to analysts at the briefing, Mr Mohl said the one-off payments to 160 staff, including himself, were essential given the size of their workload in the lead-up to the demerger later this year. They were also designed to prevent key staff from being poached by rivals.

AMP revealed last week when it released its 580-page explanatory memorandum on splitting its Australian and British businesses that it would make the payments to staff “critical to the demerger”.

Its Australian operations, to be called AMP after the demerger, will make payments totalling $12.7 million to 58 staff while the British business, HHG, will hand out $24 million to 102 staff.

Mr Mohl says the payments are necessary given that other long-term incentives offered by the company are effectively worthless because the value of AMP’s shares has plummeted in the past year.