Matthews to stand down after 14 months at Aviva

Business Correspondent/Personal Finance Editor

Friday 8 February 2013

Trevor Matthews, the former Standard Life executive given a controversial £2.5 million "golden hello" to join Aviva from Friends Life only 14 months ago, is to step down in another reshuffle at the insurer.

RESHUFFLE: Trevor Matthews was given a £2.5m 'golden hello' by Aviva, after receiving £1m garden leave from Standard Life & Friends Life. Picture: Steve Cox PROMOTION: Scotsman David McMillan is new Aviva Europe chief.

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SIMON BAIN

Aviva faced one of the biggest ever investor protests last May, with a 50% vote against its re-muneration report, prompted largely by the £2.5m pay-out to Mr Matthews.

Now the Australian who made his mark in Edinburgh as Standard's UK chief executive from 2004 to 2008 is in line for another pay-off, after picking up almost £1m in "gardening leave" payments from Standard and Friends Life for staying at home for a total 12 months in 2008 and 2011.

Mr Matthews, 60, received a £470,000 cash payment when he started work as chief executive of Aviva UK at the end of 2011, and a £45,000 bonus despite starting on December 2. The rest was in shares worth £2m, to vest over three years. His £720,000-a-year salary was due to be reviewed in April 2013. However, Aviva said yesterday Mr Matthews was moving into an "advisory role" and would step down before the annual meeting probably in early May. An Aviva spokesman said: "Nothing has been agreed in terms of Trevor's severance arrangements." However, the company's last remuneration report says that unless Mr Matthews is sacked, "any unvested shares subject to the award will vest immediately" following his departure. The executive pay row exacerbated discontent among Aviva's major shareholders, who forced the resignation of chief executive Andrew Moss last April. Just before he quit, Mr Moss scrapped the Aviva UK role and appointed Mr Matthews "chairman of developed markets", where he remained under chairman and acting chief executive John Macfarlane. However, Mark Wilson, Aviva's new group chief executive since January 1, yesterday put his stamp on the senior team, promoting Scottish accountant David McMillan to one of the insurer's biggest executive roles and bringing in two new high-fliers from his former company AIA. Noting Mr Matthews' "considerable contribution", Mr Wilson said: "Trevor has broad insurance experience and he has added stability to the group's developed markets during a period of business change." He said he would "continue in an advisory capacity for a number of months". Mr Macfarlane said last May, after Mr Moss's departure, he was ditching the "one Aviva twice the value" mantra and "moving away from those aspirational things". Now Aviva says the appointments will strengthen its leadership team as it "moves into the next stage of its transformation". Mr McMillan, who lives in Edinburgh with his wife, Scottish Water HR director Shirley Campbell, and their three teenage boys, joined Aviva 10 years ago and was until last year chief executive of the market-leading UK general insurance business. He was then given the role of transformation director, and in recognition of his "positive impact on the business" is now elevated to chief executive Aviva Europe, responsible for the businesses in Spain, Italy, Turkey, Poland, Lithuania and Russia, as well as chairing its French board. Another key member of the 15-strong group executive is Helensburgh-born David Barral, who heads up Aviva's UK life business. The new transformation director is Nick Amin, who, like new Asian director Khor Hock Seng, will join from AIA next month. An internal promotion sees Jason Windsor become chief strategy and development officer, as well as taking responsibility for Aviva Investors. Mr Wilson said: "These changes are about ensuring we have the right people in the right jobs and the best possible leadership team, so Aviva can achieve its undoubted potential." Aviva shares, which sank to 255p last June, closed 0.4p firmer at 353.4p.

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Matthews to stand down after 14 months at Aviva

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