Shareholders reject Aviva pay plans

 

Aviva suffered a major shareholder revolt today after more than half
of the votes at its annual meeting failed to back the insurer's pay
awards.

In another sign of growing investor activism, the defeat came despite chief executive Andrew Moss this week waiving a near-5 per cent pay rise which would have taken his annual salary over the £1 million mark.

Some 50 per cent of votes placed outside the AGM went against the pay report, while an additional 9 per cent were withheld, in one of the biggest ever shareholder protest votes.

The remuneration report would have been thrown out completely had new measures to give shareholders binding votes, as put forward by Business Secretary Vince Cable and backed by investor groups included the Association of British Insurers, been brought into effect.

The embarrassing defeat follows a similar showdown between shareholders and banking giant Barclays, in which nearly a third of votes failed to back its remuneration report after chief executive Bob Diamond took a £17.7 million pay package for 2011.

Similar scenes were playing out at Hovis to Mr Kipling owner Premier Foods' annual meeting, where just over 30 per cent of shareholder votes failed to back the remuneration report.

Premier, which saw its shares slide around 70 per cent throughout 2011, paid around £3.5 million to its executives last year, including a £1.9 million "golden hello" for new chief executive Michael Clarke when he joined eight months ago.

Back at Aviva, Mr 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.

Mr Moss was also awarded a £1.2 million bonus, equal to 120 per cent of salary, while Trevor Matthews, Aviva UK chief executive, was awarded a £45,000 bonus despite just joining the board on December 2.

Aviva chairman Lord Sharman apologised to shareholders at the AGM for ignoring their views when setting executive pay.

Lord Sharman said: "We recognise that a number of shareholders feel that we have not reflected their views, and overall shareholder value, in the judgments we made on remuneration and for this the Board and I apologise."

Pensions Investment Research Consultants (Pirc) dubbed Aviva's executive pay awards "excessive", while the ABI issued an "amber alert" warning over the remuneration report.

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.

The insurer earlier this week 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.

PA

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Books should be for everyone, says Els, 8. Publisher Scholastic now agrees
booksAn eight-year-old saw a pirate book was ‘for boys’ and took on the publishers
Life and Style
Mary Beard received abuse after speaking positively on 'Question Time' about immigrant workers: 'When people say ridiculous, untrue and hurtful things, then I think you should call them out'
tech
Life and Style
Most mail-order brides are thought to come from Thailand, the Philippines and Romania
life
News
i100
Life and Style
tech
Voices
Margaret Thatcher, with her director of publicity Sir Gordon Reece, who helped her and the Tory Party to victory in 1979
voicesThe subject is being celebrated by the V&A museum, triggering some happy memories for former PR man DJ Taylor
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions