Aviva suffers humiliation as 54% of shareholders vote against executive pay plans
15:41 GMT, 3 May 2012
Aviva bosses suffered a defeat over pay today after 54 per cent of shareholders voted against its remuneration plan.
A revolt had been predicted but not on the scale seen at the insurer's annual meeting at the Barbican in London today. A count of proxy votes showed 54 per cent against and just 46 per cent in favour.
Including abstentions the result came out as 50 per cent against, 41 per cent in favour and 9 per cent abstaining.
The size of the rebellion is put into perspective when compared to the average shareholder dissent among FTSE 100 companies of 6 per cent.
Aviva has been the target of shareholder groups after bumper pay deals coincided with falling profits last year.
Pressure: Aviva boss Andrew Moss did not accept 46,000 pay increase
Speaking at the meeting, Scott Wheway, chairman of Aviva’s remuneration committee, said: 'We could and should have done more to engage with shareholders.'
Earlier this week chief executive Andrew Moss waived a 4.8 per cent pay rise which would have pushed his salary above 1million. He will still receive a package worth up to 5.2million.
Trevor Matthews, who was appointed UK chief executive in December before switching roles as part of a management reshuffle, was last year handed a package that could reach up to 4.2million – including a 2.5million ‘golden
hello’ to compensate him for awards forfeited when he left his previous
role as vice chairman of Friends Life.
Those awards came as Aviva was counting the cost of failing investments that hit profits last year. Aviva reported a 1.1billion hit from long-term investments in indebted eurozone countries last year.
Aviva shares lost almost a quarter of
their value last year, reflecting
the firm's exposure to troubled eurozone economies such as Italy and
Spain. That compares with a 5 percent fall in the FTSE Life Insurance
index and a 12 percent decline in the Stoxx 600 European insurance
Prior to the vote today, corporate governance campaigners had called for shareholders to reject the pay plans. Investor group Pirc led the revolt while the Association of British Insurers issued Aviva with an ‘amber top’ warning – indicating that it would call on its members to vote down the deal.
The ABI rebuke is particularly embarrassing for Aviva as the insurer is itself a member of the trade body.
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