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Aviva boss faces pay cut over pref share 'fiasco'

Chief executive Mark Wilson could lose some of his 2018 bonus over group's controversial attempt to cancel preference shares.

 
Aviva boss faces pay cut over pref share 'fiasco'

Mark Wilson, chief executive chair of Aviva (AV), and fellow directors of the FTSE 100 insurer could lose some of their 2018 bonuses over the ‘fiasco’ of its failed attempt to cancel non-redeemable, high-yielding preference shares.

While executive remuneration is by design variable the decision to slash non-executives fees for external advice would be highly unusual. The company made the admission at a heated annual general meeting yesterday where shareholders accused the business of blundering into a ‘calamitous and self-inflicted’ wound.

The insurer incited investor fury – and a later warning shot from the City regulator – after it said it would cancel its £450 million preference shares at par, knocking their value from a previous premium. It was later forced into a u-turn and has offered to compensate any investor who sold their stake at the bottom.

Aviva chair Sir Adrian Montague said: ‘We will come to the question of remuneration for the management and the board in due course.’ He added that any ‘reputation implications’ remaining to be resolved following the conclusion of an inquiry would also be addressed, the Times reported. ‘We will not flinch from that.’

Wilson, who received £2.9 million in bonuses and pay last year, down from £3.1 million the year before, tried to deflect investors' attention to the results saying it had been ‘one of our best years ever’.

2 comments so far. Why not have your say?

Cynical Investor2

May 11, 2018 at 18:46

Do injured Investors feel satisfied at the Chairman's decision too say ........"the management and board in due course". Sounds like a feather duster when there needs too be a complete appraisal of competence within the Aviva Heirarchy.

In 3 words " Not good Enough".

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andrew moffat

May 11, 2018 at 23:52

It seems as if the representations made to the Board - of which I was one such - have had an effect although this ridiculous episode should never have occurred in the first place. I was unable to attend the AGM but was heartened to read, in the article above, that the matter was also well ventilated at the meeting.

The Chairman, Montague, should have stamped on this at the outset; it is as bad a reflection on him as it is on the CEO and it has done much harm to the brand, focused the nation's press, has created enormous upset and irritation amongst shareholders and should never have been contemplated.

In sum, it would have been hard to make this up. Salutary lessons should be learned and very hefty cuts made to unacceptable bonuses, which would be an appropriate reminder of the income cuts that could have been imposed upon elderly pensioners. Wilson is fortunate not to be sacked - which applies equally to Montague. I would also like to know the CFO's role in this shambles.

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