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Aviva boss Moss to walk away with £1.3m payment

by Daniel Grote, William Robins on May 08, 2012 at 15:02

Aviva boss Moss to walk away with £1.3m payment

Aviva's Andrew Moss will walk away with a £1 million 'golden goodbye' plus £209,000 of pension after he quit as chief executive of the life company.

Moss will receive a full 12 months' basic salary plus a £300,000 payment on leaving, as well as £209,000 of pension. His basic salary last year was £960,000.

Aviva said Moss had stepped down from the chief executive role with immediate effect, and he will leave the company at the end of May.

Chairman designate John McFarlane will become interim executive deputy chairman with immediate effect and executive chairman from 1 July pending the appointment of a new chief executive.

Aviva chairman Lord Sharman said Moss had decided it was in the best interests of the company for him to make way for new leadership.

'We should acknowledge the progress that has been achieved under Andrew Moss's leadership,' said Sharman. '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. He reduced the cost base, improved operational performance and more recently began the implementation of the strategic focus, with the sale of RAC, the deconsolidation of Delta Lloyd and a number of overseas disposals.'

Moss's departure follows mounting pressure on the Aviva chief executive. Last week it lost the shareholder vote on executive pay at its annual general meeting. Shareholders were urged to vote against the measures by the Association of British Insurers and the Pensions & Investment Research Consultants, who argued the pay packages handed to directors were too generous.

Investors were angered by the £2.5 million 'golden hello' handed to former Standard Life UK boss Trevor Matthews when he joined last year. Aviva had pledged to review pay packages for new directors in the run-up to the vote, with Moss deciding not to accept the salary increase he was granted in 2012, but it was not enough to sway shareholders.

Reports over the weekend suggested the vote was to be interpreted as a protest against Moss. The Sunday Telegraph quoted a spokesman for one of two large Aviva shareholders who had called for Moss to be replaced as saying: 'The vote was really against Moss as chief executive.'

Moss has struggled to improve the performance of Aviva's share price during his time as chief executive. Since July 2007, when he assumed the top job, shares have fallen 59% in capital terms, although that period does include the impact of the financial meltdown.

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9 comments so far. Why not have your say?

Pat Riot

May 08, 2012 at 07:26

With or without huge payout for failing the shareholders so comprehensively?

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Daniel Grote - Citywire

May 08, 2012 at 07:46

Have just added in a line to the story - Aviva will be announcing the financial terms of his departure at a later date

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complacency rules

May 08, 2012 at 08:21

I hope this sends out a powerful message to all company directors. Bonuses should be based on results achieved and not on promises for the future. The article makes it clear that. although he may have worked hard, he did not achieve results. The arrogance of trying to increase his bonuses despite the fall in shareholder value has rightly been punished by the shareholders and resulted in his resignation. As he has resigned what justification is there for a severance package? All this means is that he gets his bonus in another way, and does not even have to work for it. He wanted bonuses for failing to achieve results and 'bonuses' if he resigns. Rewards for failure all round. I would not be surprised if he re-emerges in another high profile role very soon. What about the chairman and the rest of the board, when will they fall on their swords?

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James Clancy

May 08, 2012 at 09:38

What financial terms has to negotiated He should be treated like any other employee leaving the company, (or his has made redundant during his time as CEO).

That is he should be given time to clear his desk, say his farewell to colleagues and put on garden leave. He should also be reminded he is still under contact and has to come into work if requested He should be informed that the HR department will send him details of his pension up to date. As he quit his job there should be no additional enhancements

The only point that may differ from other employees would be points surrounding his share holding and option his contract requires him to receive.

Just shows the arrogance of these guys. While most owners managed business that invest and risk their own capital in most circumstances have reduce their income to either help preserve jobs ,or save their business.

This lot still think they should be paid what every the circumstance.

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brian hammond

May 08, 2012 at 14:38

Could be a vacancy at Blackburn Rovers - a cockerel went missing yesterday !

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complacency rules

May 08, 2012 at 15:24

He is being rewarded for failure and having been rejected by the shareholders he is being rewarded for leaving. What a disgrace! He could not lose, he either gets the bonus he was after or he gets a huge payoff. No wonder shareholders are in revolt. The rest of the Aviva Board should resign in shame and without any pay off.

At least his going resulted in asurge in the Aviva share price, probably the only addition to shareholder value that he has managed to generate.

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Chris Geeson

May 08, 2012 at 15:57

Interesting, lots of vitriol aimed at the man leaving but someone gave him his contract when he joined and a years rolling contract would automatically create the years basic plus pension rights for the same time period. Having seen a few of these contracts over the years 1 year is the norm but many have longer. He is not receiving an enhancement he is receiving the value of his contract how ever much it may seem like an overpayment.

Perhaps the remuneration committee should come under scrutiny but they are only following what the vast majority offer to people at this level. To change it you would have to not only level the playing field but dig it up and start again, it isn't going to happen.

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Dave

May 09, 2012 at 11:25

to James, I suspect that he is being treated like any other employee in that he is being treated as per the contract that he agreed with Aviva. The fact that this is likely to be a touch more generous than say one of their administrators shouldn't really be a cause for shock and surprise.

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complacency rules

May 09, 2012 at 11:55

To Dave

How many employees have a contract which allows such generous severance terms for resigning. The position generally is as James has stated, except without gardening leave. If his contact did provide such generous terms then something smells rather badly. The remuneration committee does need looking at, as does the whole board who approved the remuneration terms. Hence my suggestion that they should all resign without a severance package. No doubt the whole board supported his actions whilst in office and indeed suppoorted the motion for bigger bonuses. The whole board has joint responsibility for the 75% reduction in shareholder value and therefore should all resign without a severance package. That is what honourable people would do. Sorry I forgot we are talking about Directors in the Finance sector who are just out to feather their own nests rather than seek to meet the needs of their clients and shareholders.

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