Aviva suffered one of the biggest ever investor protests on pay yesterday with a 50% vote against its remuneration report at a stormy annual meeting in London.
A further 9% of votes were withheld.
The backlash came despite Aviva promising ahead of the meeting that chief executive Andrew Moss would waive a £46,000 pay rise on his £960,000 salary, and it would review its packages for newly recruited senior executives.
The review promise was in reference to the £2.5 million "golden hello" paid to UK chief executive Trevor Matthews last year, a payout that sparked shareholder anger and prompted corporate governance group Pirc to brand Aviva's executive rewards "excessive".
Mr Matthews, the former Standard Life UK chief, received £470,000 in cash, shares worth £2m, and a £45,000 bonus for 2011, though he only joined Aviva on December 2.
The remuneration report would have been thrown out completely under new measures to give shareholders binding votes put forward by Business Secretary Vince Cable and backed by investor groups included the Association of British Insurers.
The embarrassing backlash follows a similar showdown last Friday between shareholders and Barclays, in which nearly one- third of votes failed to back its remuneration report after chief executive Bob Diamond took a £17.7m pay package for 2011.
Yesterday there was also unrest at satellite company Inmarsat, which said almost 40% of votes had been cast against its remuneration report at its annual meeting; and at Premier Foods, where there was a 30% protest vote.
Mr Moss's bonus at Aviva was £1.2m, in a total rewards package worth up to £5m.
Aviva chairman Lord Sharman apologised to shareholders for ignoring their views when setting executive pay. He said: "We recognise that a number of shareholders feel we have not reflected their views, in the judgments we made on remuneration and for this the board and I apologise."
The insurer earlier this week said its remuneration committee believed that the proposed levels were an "appropriate reward".
But 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."
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