Aviva 2006 Annual Report Download - page 103

Overview Business review Governance Financial statements Other information
Aviva plc
Annual Report and Accounts 2006 99
Dilution
Awards granted under the Aviva Annual Bonus Plan 2005 and the Aviva Long-Term Incentive Plan 2005 are met by the issue of new
shares at the time that the awards vest. The Committee monitors the number of shares issued under its various all employee and
discretionary share plans and their effect on dilution limits. The relevant dilution limits established by the Association of British Insurers
in respect of all share plans (10% in any rolling ten year period) and executive share plans (5% in any rolling ten year period) were, based
on the Company’s issued share capital at 31 December 2006, 2.60% and 1.12% respectively.
Between March 1998 and March 2003, the Company met its liability for shares awarded under the incentive plans by funding an
employee trust that acquired shares in the market at the time of grant. Details of the shares currently held in the employee trusts are
set out in note 29 to the accounts.
Accounting changes
Major changes to accounting policies and practices in 2005, including adopting International Financial Reporting Standards and European
Embedded Value principles for supplementary reporting, affected a number of the key performance indicators and performance measures
used in connection with the Company’s long-term incentive plans. During the transition period the Committee received reports showing
the impacts of these changes on the performance measures and satisfied itself that the evaluation of actual performance against the
performance conditions which wereoriginally set using prior accounting practices is appropriate having made allowance for the
accounting changes.
Senior executives’ remuneration
The total compensation paid during the year to key management personnel, being those having authority and responsibility for planning,
directing and controlling the activities of the Company,including the Company’sdirectors and non-executive directors (as required to be
disclosed by International Accounting Standard 24) was £53 million (2005: £34 million) and is set out below in note 53 to the Accounts.
Non-executive directors’ remuneration
The Company’s Articles of Association provide that the total aggregate remuneration paid to the Chairman and non-executive directors
will be determined by the Board within the limits set by shareholders. The current aggregate limit of £1.5 million was approved by
shareholders at the Company’s 2005 Annual General Meeting. Executive directors are remunerated under their service contracts and
receive no additional fee for serving as directors.
Chairman £375,000 pa
Boardmembership fee £50,000 pa
Additional fees are paid as follows:
Senior independent director £10,000 pa
Committee Chairman – Audit (inclusive of committee membership fee) £35,000 pa
–Remuneration (inclusive of committee membership fee) £20,000 pa
Committee Membership – Audit £10,000 pa
–Remuneration £10,000 pa
–Nomination £5,000 pa
–Risk and Regulatory £5,000 pa
–Corporate Social Responsibility £5,000 pa
Other than for the Chairman’s fee, which was increased by £15,000 pa from 1 January 2006 to reflect the loss of a car allowance
of £18,000 pa from that date, no increases weremade to the level of directors’ fees during the year. However, fees payable to the
senior independent director, chairman of the Remuneration Committee and for membership of the Risk and Regulatory and Corporate
Social Responsibility committees were introduced from 1 April 2006 following changes to the Board committee structure and
directors’ responsibilities.
In addition to the Board membership and committee membership fees Derek Stevens received an additional amount of £10,000
per annum for serving as the chairman of the Aviva Staff Pension Scheme. The fee for Guillermo de la Dehesa includes an amount of
140,000 per annum for serving as the non-executive chairman of the Group’soperations in Spain. No non-executive director accrued
retirement benefits during the year.