Aviva attempted yesterday to head off a potentially embarrassing bust-up with investors over executive pay, admitting it has misjudged the mood in the City.
With anger over boardroom pay spreading from the general public to top institutional shareholders, the insurer said it would "review" its pay schemes, in particular how much it pays to poach executives from other firms. On the surface that seems to be a reference to Trevor Matthews, the head of the developed markets arm, who got a £4.25m welcome package after arriving from Friends Provident.
But Aviva sources say the issue is wider than one man, claiming that trends about what is deemed reasonable are changing.
Aviva faces an argumentative annual meeting on Thursday at the Barbican in London, with investors poised to vote against pay deals. Whether yesterday's move will be enough to quell that anger remains to be seen.
Pirc, the pensions consultant, and the Association of British Insurers have both suggested investors should vote against the company on this issue.
Andrew Moss, the group chief executive widely seen as under considerable pressure to improve performance, said yesterday he would decline a 5 per cent rise in his basic pay. He got £2.7m in pay and perks last year.
Scott Wheway, the head of Aviva's 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." The three biggest Aviva shareholders are Blackrock with 5 per cent, Legal & General with 4 per cent and Axa with 3.9 per cent.
Aviva is not promising an overhaul of executive pay levels, merely saying it will "continue to engage" with investors. "Having listened to them, we have sought to address their concerns," Mr Wheway said.