Aviva's chief executive Andrew Moss has stepped-down after a bruising shareholder meeting last week in which nearly half of the British insurance group's shareholders voted to reject his multi-million pound pay deal.
Aviva shareholders had struck back at the British insurers' plans for exeuctive pay and bonuses only days after Moss had agreed to waive his own pay rise following criticism over his performance.
Shares in the group surged more than 5.5 percent in early trading to change hands at 318.7 pence per share in London.
Investors owning more than 800,000 shares cast proxy votes against Aviva's remuneration proposals at the company's annual general meeting in London Thursday, a non-binding figure representing more than 54 percent of the votes cast. Around 152,000 shares abstained.
Aviva, the UK's second largest insurer, is the lastest European firm to face mounting shareholder determination to align executives' pay packets more closely with performance.
Moss was due for a 5 percent pay rise, which would have taken it to £1m a year. In 2011, he earned nearly £2.7m from his total remuneration package, which included a £951,000 salary, £1.16m in stock and cash bonuses, a £480,000 long-term incentive plan and a further £98,000 in other benefits.
Aviva's stock has dropped nearly 58 percent since Moss became CEO in 2007. Shares in the group edged nearly 1 percent higher in London trading Thursday, changing hands at 311.66p.
"We take the views of our shareholders very seriously. I am disappointed that we haven't done that as well as we should have on this occasion," said Scott Wheway, chairman of Aviva's remuneration committee last week. "A number of shareholders have indicated that they would like to see a different approach to the way we compensate senior directors on recruitment and an even closer correlation between our pay packages and shareholder returns. Having listened to them, we have sought to address their concerns and will continue to engage with them on this matter."
In 2011 Moss trousered £2.69m from his total remuneration package, which included a £951,000 salary, £1.16m stock and cash bonus, £480,000 in a long-term incentive plan, and a further £98,000 in other benefits.
Chairman Designate John McFarlane will serve as interim CEO while a replacement is found.
Aviva shares closed at 302.3 pence per share Friday, down 2.9 percent on the session, extending the year to date loss to around 3.7 percent.