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 executive pay and bonuses only days after Moss had agreed to waive his own pay rise following criticism over his performance. Aviva shares have lost nearly two-thirds of their value since Moss took over as CEO in 2007.
Shares in the group rose 3.2 percent to change hands at 312.2 pence per share in London at 0900 GMT.
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.
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.
"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 earned £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.