Aviva chief steps down after shareholder revolt

Senior News Reporter

Wednesday 9 May 2012

THE boss of the UK's largest insurer has stepped down from his £2 million-a-year job as the shareholder revolt rocking the boardrooms of some of the country's most powerful companies claimed another casualty.

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Alison Campsie

Aviva chief executive Andrew Moss, who left his post with immediate effect, is the latest victim of the so-called "shareholder spring" over climbing salaries and bonus payments.

He is now in line for a £1.5m exit package.

Trinity Mirror chief executive Sly Bailey had already stepped down amid growing disquiet about lucrative remuneration deals at a time of falling share prices and profit pressure.And Barclays chief Bob Diamond faced a hostile shareholders' meeting last week after almost 29% refused to back executives' pay deals. Mr Diamond has hung on to his job so far.Mr Moss, chief executive of Aviva since July 2007, left this post immediately but will stay with the company until the end of the month. His move comes after more than half of shareholder votes – 59% – failed to back the firm's pay report. The 54-year-old Oxford graduate had offered to waive a near-5% pay rise which would have taken his annual salary over the £1m 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.His overall package includes a £1.2m bonus, equal to 120% of salary, while Trevor Matthews, Aviva UK's chief executive, was awarded a £45,000 bonus despite joining the board on December 2.Lord Sharman, the outgoing Aviva chairman, said Mr Moss had approached him about stepping aside to make way for new leadership. He added: "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."Investors appeared to back Mr Moss's departure, with shares in the firm jumping 5% in early trading, adding some £450m to its market value at £9.2 billion.A spokesman for PIRC, an advisory consultancy on corporate governance, welcomed the growing might of shareholders.He said: "If we have got a market-based approach to corporate governance, and if we want this to work, then shareholders have to assert themselves. "They clearly didn't do that prior to the financial crisis but now you see them standing up for their rights."The spokesman said the "shareholder spring" would ultimately be good for business.In a sign of growing influence, bookmakers William Hill had its £1.2m retention bonus for chief executive Ralph Topping passed by a whisker, with 50.1% of proxy votes. There could be further backlashes in the coming days with annual meetings scheduled for Unilever, ITV, commodities giant Glencore and science materials group Cookson.Three banks – RBS, HSBC and Lloyds – are still to hold their annual shareholders' vote.However, further revolt at RBS is not expected given chief executive Simon Hester waived his £1m bonus last year amid growing public and political pressure.David Fleming, the Unite union's national officer, described the action at Aviva as "a welcome and important step".He said: "Under the disastrous leadership of Andrew Moss Aviva has scaled back its operations resulting in job losses, including the decimation of its Irish workforce and pay suppression for the staff."The issue of shareholder power and executive pay is due to be addressed in the Queen's Speech today. Business Secretary Vince Cable had hoped to introduce binding votes, which would see pay deals needing support of 75% of shareholders.It is understood this may have been dropped from the Enterprise and Regulatory Reform Bill after objections from business leaders. The Confederation of British Industry said yesterday it did not support the introduction of binding votes.It said it was the role of remuneration committees and management boards to decide pay awards, and that shareholders did not have a role in the day-to-day decisions of companies.PIRC said it supported the notion of binding votes. A spokesman added: "We would also like to see membership of remuneration committee broadened to include shareholders and members of the public."

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Aviva chief steps down after shareholder revolt

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