The boss of Aviva, the UK's largest insurer, is to step down with immediate effect, the company said today, as shareholder anger claimed the scalp of another City executive.
Andrew Moss, who has been chief executive since 2007, will leave after more than half of shareholder votes failed to back the firm's remuneration report at its annual meeting last week, which was widely seen as a criticism of Mr Moss's performance.
The Oxford graduate offered to waive a near-5% pay rise which would have taken his annual salary over the £1 million mark but this was not enough to appease investors, who have been hit by a 30% drop in the share price in the last year.
Loading article content
The 54-year-old, who has worked for Lloyd's of London and HSBC, leaves after two other chief executives, David Brennan at AstraZeneca and Trinity Mirror's Sly Bailey, stepped down amid increasing shareholder discontent.
Mr Moss, who was embroiled in an affair scandal in 2009, will be replaced on an interim basis by incoming chairman John McFarlane, who will become executive deputy chairman with immediate effect and executive chairman from July 1.
Investors appeared to back the move as Aviva shares jumped 5% in early trading, adding some £450 million to its market value at £9.2 billion.
Aviva could not confirm how much severance pay Mr Moss will receive, but the annual report states that if a director resigns they are entitled to pay in lieu of the six-month notice period, which would equate to £480,000.
Mr Moss's departure follows reports that two unnamed major investors had called on Mr McFarlane to replace Mr Moss at the earliest opportunity.
Some 59% of votes failed to back Aviva's pay report, in one of the biggest ever shareholder protest votes, while 10% went against or withheld their votes on the re-election of Mr Moss.
Mr Moss was also awarded a £1.2 million bonus, equal to 120% of salary, while Trevor Matthews, Aviva UK chief executive, was awarded a £45,000 bonus despite just joining the board on December 2.
The remuneration report would have been thrown out completely had measures to give shareholders binding votes, as put forward by Business Secretary Vince Cable and backed by investor groups, been brought into effect.
Lord Sharman, outgoing Aviva chairman, confirmed Mr Moss had approached him about stepping aside to make way for new leadership.
Lord Sharman acknowledged the "progress that has been achieved under Andrew Moss's leadership".
He said: "Through the global financial crisis he led the consolidation of our international presence and the integration of 40 brands into the very powerful single Aviva brand."
Aviva's share price has declined around 60% since Mr Moss took the helm in July 2007.
The performance has most recently been hit by the company's exposure to troubled eurozone economies such as Italy and Spain, and shares are around 30% lower than they were a year ago.
Mr Moss was set to unveil his new strategy at an investor day on May 24, but this has been postponed until after a board meeting in June.