Aviva slashes bosses' awards after investor intervention
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Version 0 of 1. Aviva has watered down long-term share awards for two of its senior executives following talks with the influential investor voting agency Institutional Shareholder Services (ISS). The FTSE 100 giant said that both its chief executive Mark Wilson and finance director Tom Stoddard had agreed not to accept the long-term incentive plans (L-tips) handed to them earlier this year. Under the terms of the three-year awards, which are dependent on the company’s performance, Mr Wilson stood to make up to 350 per cent of his annual salary – worth a maximum £3.43m – and Mr Stoddard 250 per cent, £1.03m. The decision was taken to reduce them to 300 per cent and 225 per cent respectively after a meeting with an unnamed “shareholder voting agency”, understood to be ISS, which sends out advisory reports to big fund managers. Patricia Cross, the chairman of Aviva’s remuneration committee, said: “Aviva has received significant shareholder support for its remuneration report, following Aviva’s strong financial performance in 2014 and delivery against its strategic objectives. However, the board was disappointed to receive feedback this week from a shareholder voting agency, which expressed concern over the proposed L-tip awards, despite the tangible progress made by the management team and the award being within the company’s remuneration policy.” The unexpected move contrasts sharply with the decisions taken by Aviva’s board in 2012 when its former chief executive Andrew Moss was ousted during the so-called “shareholder spring” over what were seen as his excessive pay demands. It comes ahead of the annual reporting season, when executive pay plans are voted on by shareholders. Under the stewardship of Mr Wilson, who joined at the start of 2013, Aviva’s share price has risen by around 50 per cent and the company last week sealed its £5.6bn merger with Friends Life. The deal represents one of the biggest shake-ups in the industry since the merger of CGU and Norwich Union that created Aviva almost 15 years ago. Friends Life was created by the entrepreneur Clive Cowdery, who merged Friends Provident with parts of Axa and Bupa. Aviva shares rose 5p to 555p yesterday. |