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James Moore: Aviva might want to show value to shareholders

Faced with the very real possibility of a Barclays-style blow-up at its AGM on Thursday, Aviva's chief executive, Andrew Moss, has taken the prudent course and declined an inflation-busting pay rise of nearly 5 per cent. Perhaps he, at least, sees the problem: notwithstanding the continuing questions about strategy (critics claim it doesn't have one), the shares have fallen off a cliff over the past couple of months.

Unfortunately this fact seems to have passed Scott Wheway, the chairman of Aviva's remuneration committee.

Ditto his colleagues, who released a statement in which there was much hand wringing yesterday.

Mr Wheway seemed genuinely surprised that shareholders are unhappy with the company offering up big pay rises to executives and even bigger golden hellos to those executives' pals when they have been losing millions.

But then this is a company with form. When Mr Moss joined he came up with the idea of an ambitious campaign aimed at doubling earnings per share, called One Aviva, Twice the Value.

Which really ought to be what he is paid his salary for. Not in the view of Aviva's remuneration committee, though. It could have monitored executives' achievements against the plan's targets and used that to inform its decisions on the existing bonus schemes.

But it didn't. Instead it created a brand new additional-bonus scheme linked to the plan.

This sort of thing sets a terrible example to the firms in which Aviva's fund-management arm invests. After all, what's good for the goose... But there's more. Those "stretching targets" that remcos like to bang on about? One analyst has said Aviva's are now below the level of last year's results. Perhaps it is time for a fresh campaign: One Aviva, Half the Value, with a special extra-bonus scheme of its own.

Despite all this, Mr Wheway is still insisting that the pay rise is justified and in shareholders' long-term interests. As if Mr Moss were a stellar talent who might be on the radar of a rival with a golden hello of its own.

Thanks to the committee's spectacular misjudgement of the mood of the people whose interests it is supposed to represent, Mr Moss is going to have to prove this is the case rather quickly. Otherwise it won't just be the remuneration committee which will be fielding calls from unhappy shareholders.