Aviva Boss Forced Into Pay Climbdown
The boss of insurer Aviva has bowed to shareholder pressure and waived a near 5% pay rise which would have taken his annual salary over the £1m mark.
Chief executive Andrew Moss was awarded a 4.6% rise in March on his £960,000 annual salary but has decided not to accept the increase following talks with major investors.
The decision comes after investor group Pensions Investment Research Consultants (Pirc) called on shareholders to vote against Aviva's executive pay report at its annual meeting on Thursday.
It is hot on the heels of a shareholder rebellion at Barclays, which on Friday saw a landmark 26.9% of investors vote against the bank's remuneration report.
Shareholders heckled and booed the bank's chairman as he apologised over poorly communicated pay policies at the AGM, which saw Barclays CEO Bob Diamond's £25m pay package for 2011 approved despite the sizeable mutiny.
Pirc, which also urged its members to vote against Barclays executive remuneration report, have now dubbed Aviva's executive pay awards "excessive".
Shareholders have also raised concerns over pay for new recruits, while the Association of British Insurers has issued an "amber alert" warning over the company's pay report.
In a statement, Aviva acknowledged shareholder concerns that executive pay did not appropriately reflect changes in the value of the company's shares.
Aviva's shares have been hit by their exposure to troubled eurozone economies such a Italy and Spain, and are around 30% lower than they were a year ago.
Yet, Mr Moss received a total pay and perks package worth up to £5m last year if certain targets were met.
Aviva 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: "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."