The shareholder revolt sweeping through the City claimed its biggest scalp yesterday when Andrew Moss abruptly quit as the boss of giant insurer Aviva, a move cushioned by a pay-off of £1.75m.
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Mr Moss is the third top corporate head to bow to the growing wrath of City shareholders in the past few days.
His immediate departure as chief executive followed a stunning rebellion last week by investors who rejected executive pay by a 60 per cent majority.
Sly Bailey of Trinity Mirror and David Brennan from AstraZeneca have also been forced to step down in the face of fury from investors that executive pay has remained high even as returns plummeted. And with the typical pay of bosses at most of Britain's biggest publicly listed companies rising by 11 per cent to £3.56m last year, according to research released yesterday by the BBC, more revolts could be on their way in an uprising being called the "Shareholder Spring".
John McFarlane, chairman designate, will become temporary executive deputy chairman and executive chairman from July while the insurer searches for a permanent replacement. Immediately in the frame were former RSA boss Andy Haste and Igor Mayer, recently ousted as part of Mr Moss's latest shake-up. Aviva said that Mr Moss had taken the decision because he felt it would be best for the company if he "stepped aside to make way for new leadership".
The "financial terms" of his departure, while excellent for those outside the top echelons of corporate life, indicate a shift in sentiment towards executive pay and pay-offs. He gets a year's salary, just less than £1m, and another £300,000 in settlement of all claims to future bonuses. He gets an extra pension benefit worth £209,000, but other Long Term Incentive Plans will not vest.
The news of his departure was greeted with joy by unions and the City.
Barrie Cornes, a Panmure Gordon analyst, said: "The move will be welcomed by shareholders and follows a number of events at Aviva that can at best be described as 'unfortunate'. The shares should bounce... further if Andy Haste's name becomes linked to the chief executive role."
David Fleming, the national officer for the Unite trade union, said: "This is a welcome and important step on the road to curbing greed in the boardrooms of the financial services sector. Under the disastrous leadership of Andrew Moss Aviva has scaled back its operations resulting in job losses."
Mr Moss, 54, took over as chief executive of the UK's second-largest insurer in 2007. Since his arrival, Aviva shares have more halved in value from more than 750p to about 300p. Yesterday they rose by 0.2 per cent, up 60p to 302.9p.
"Now it has finally happened," said one long-time company watcher, "I feel a bit sorry for him. He gets fired. The shares immediately soar because he's been fired and there's not much chance of him getting another big job." Mr Moss tried to quell shareholder disquiet, but his offers were deemed insufficient.
Mr McFarlane said: "My first priorities are to regain the respect of our shareholders by eliminating the discount in our share price and to find internally or externally the very best leader."
Not so handy: Andy's downfall
June 2007 Named chief executive. Starts "One Aviva Twice the Value" campaign (shares halve in his reign).
January 2009 Dumps Norwich Union brand name.
June 2009 Slashes dividend.
October 2009 Admits affair with head of human resources.
August 2010 Rejects £5bn bid from RSA for Aviva general insurance arm.
April 2012 Concocts shake-up critics say will remove credible internal successors.
May 2012 Investors revolt at AGM.