Andrew Moss, chief executive of Aviva plc, has resigned following a shareholder revolt over executive pay.
The UK-based insurer announced that Moss, who became CEO in 2007, will be leaving the group and will “cease to be chief executive with immediate effect.”
The company did not specifically address the reasons behind Moss’ departure, but it comes on the heels of Aviva’s May 3 Annual General Meeting where among other issues, executive pay was voted upon. (See: Aviva CEO waives pay hike, company to review policy following shareholder complaints) At the meeting, 823 million votes were recorded against the pay plan, or remuneration report, compared to 670 million in favour. Another 152 million votes abstained.
Aviva said Moss will receive basic salary in lieu of 12 month’s notice in accordance with his contractual entitlements in instalments and subject to mitigation. In addition, he will receive £300,000 in full and final settlement of all claims that he might have to bonus under his contract. Moss will retain the benefit of £209,000 being 5/12ths of the annual payment made in April 2012 under the Aviva Capital Accumulation Plan (i.e. the equivalent of a money purchase pension plan).
In relation to previous years’ bonus awards that have been deferred under the terms of the Annual Bonus Plans the elements relating to the 2010 and 2011 bonus that were deferred into shares will lapse in accordance with the rules of the plan, as will outstanding awards under the Long Term Incentive Plans & the One Aviva Twice the Value (OATTV) plan. 75% of the element of the 2009 bonus that was deferred into shares will vest in accordance with the rules of the relevant plan and 25% will lapse. The only other sums due to Moss will be any pay in lieu of holiday entitlement together with legal and out-placement expenses.
Aviva’s board has asked chairman designate John McFarlane to become interim executive deputy chairman with immediate effect and executive chairman from July 1, pending the appointment of a new chief executive officer. The board has asked him to maintain this executive role whilst internal and external candidates are assessed to find the very best candidate for the CEO role. It is envisaged that this process will take a number of months, at the conclusion of which he will revert to the role of non-executive chairman.
Lord Sharman, chairman of Aviva, confirmed that Andrew Moss had approached him with the decision that he felt it was in the best interests of the company that he step aside to make way for new leadership. He has offered to assist in any way he can to ensure a smooth transition.
Lord Sharman said: “We should acknowledge the progress that has been achieved under Andrew Moss’s leadership.
“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.”
Andrew Moss will leave the board shortly and a further announcement will be made to confirm the financial terms of his departure and date of leaving.
In regard to John McFarlane’s additional responsibilities, Lord Sharman said: “Aviva’s shareholders are in very good hands. His leadership and shareholder credentials are impeccable having transformed ANZ during his tenure as CEO, as well as making a significant contribution to the improvement in shareholder value at Standard Chartered prior to that.”