Aviva 2006 Annual Report Download - page 100

Aviva plc
Annual Report and Accounts 2006 96
Directors’ remuneration report continued
Share incentive plans
Details of the directors who held executive office for any part of the financial year, and hold or held options to subscribe for ordinary
shares of the Company or hold or held awards over shares in the Company, pursuant to the Company’s share-based incentive plans,
are set out below.
Savings related share options
These are options granted under the HMRC approved Savings Related Share Option Scheme. Options are normally exercisable during the
six month period following the end of the relevant (three, five or seven year) savings contract.
At Options Options Options At
1January granted exercised lapsing 31 December
2006 during year during year during year 2006 Exercise price
Number Number Number Number Number p Exercise period
Richard Harvey
Savings related options 2002 4,426 – – – 4,426 401.0 December 2009 – May 2010
Andrew Moss
Savings related options 2005 3,279 – – – 3,279 491.0 December 2010 – May 2011
Philip Scott
Savings related options 2002 4,096 – – – 4,096 401.0 December 2007 – May 2008
Patrick Snowball
Savings related options 2003 2,272 – 2,272 – –406.0 _
The mid-market price of an ordinary share in the Company on 29 December 2006, being the last business day of the year, was
822 pence, and the mid-market prices during the year ranged from 690 pence to 850.5 pence. During the year, directors made an
aggregate gain of £8,355 upon the exercise of share options.
Share awards
The Aviva Long-Term Incentive Plan 2005 was approved by shareholders at the 2005 Annual General Meeting and is described above.
This “2005 Plan” replaced the original Aviva Long-Term Incentive Plan (Aviva LTIP) which was approved by shareholders in 2001 and
under which awards weremade on an annual basis up to and including 2004.
Performance testing under the Aviva LTIP
Under the Aviva LTIP, which granted awards between 2001 and 2004, shares vest subject to the attainment of TSR and ROCE
performance conditions over a three-year performance period. The Company’s TSR, when compared with the TSR of a comparator group
of European financial services companies, needs to match at least median performance for 20% of the awards to vest. At upper decile
performance, 70% of the awards vest. Between median and upper decile, vesting is determined on a straight-line basis. ROCE of 24%
in excess of RPI over the three-year period results in 24% of the shares vesting, rising to a maximum of 30% if the ROCE exceeds 30%
over the same period.
At the end of the performance period relating to the awards granted in 2003, the Company was ranked eight out of the 20 companies
in the comparator group and the ROCE was 33.6%. As a result, 34.9% of the awards vested based on the TSR part of the Plan and
30.0% of the awards vested based on the ROCE part, making a total of 64.9% vested. The 35.1% of the awards, which did not vest,
lapsed.
The vesting history under the Aviva LTIP is as follows:
Percentage of awardvesting
Year of grant Performance period ROCE TSR Total
2001 January 2001 to December 2003 21.7 0.0 21.7
2002 January 2002 to December 2004 23.3 23.0 46.3
2003 January 2003 to December 2005 30.0 34.9 64.9
Governance continued