The boss of insurer Aviva bowed to shareholder pressure today and waived a near-5 per cent pay rise which would have taken his annual salary over the £1 million mark.
Chief executive Andrew Moss was awarded a 4.6 per cent rise in March on his £960,000 annual salary but has decided not to accept the increase following talks with major investors.
The decision, which was accepted by the board, comes after investor group Pensions Investment Research Consultants (Pirc) called on shareholders to vote against Aviva's executive pay report at its annual meeting on Thursday.
Banking giant Barclays was stung by its shareholders on Friday after nearly a third of their votes failed to back the bank's bumper pay awards.
Pirc, which urged its members to vote against Barclay's remuneration report on Friday, dubbed Aviva's executive pay awards "excessive".
Elsewhere, the Association of British Insurers issued an "amber alert" warning over Aviva's remuneration report.
Mr Moss received a total pay and perks package worth up to £5 million last year if certain targets were met.
Aviva said its shareholders had expressed concerns over pay for new recruits as well as whether overall levels of remuneration reflected changes in shareholder value through the year.
Aviva's shares have been hit by their exposure to troubled eurozone economies such as Italy and Spain, and are around 30 per cent lower than they were a year ago.
Aviva said its remuneration committee believed that the proposed levels of remuneration were "appropriate reward" but will now review how it pays future joining executives for the loss of entitlement from their previous role.
Scott Wheway, chairman of the remuneration committee, said: "We take the views of our shareholders very seriously. I am disappointed that we haven't done that as well as we should have on this occasion.
"A number of shareholders have indicated that they would like to see a different approach to the way we compensate senior directors on recruitment and an even closer correlation between our pay packages and shareholder returns.
"Having listened to them, we have sought to address their concerns and will continue to engage with them on this matter."
Aviva achieved record operating profits of £931 million in its UK life insurance division for 2011, with gains in its core markets of workplace savings, annuities and equity release products and protection.
In its general insurance business, where it is the UK market leader, Aviva's profits were up 7 per cent to £520 million after the roll-out of direct pricing to motor insurance brokers and the launch of its quotemehappy website.