Aviva 2007 Annual Report Download - page 103
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Please find page 103 of the 2007 Aviva annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Aviva plc
Annual Report and
Accounts 2007
99
Governance
Tidjane Thiam
(Resigned in September 2007 and is serving a contractual notice period on “garden leave” until 20 March 2008.
Mr Thiam is bound by a non-compete covenant that runs concurrent with this period of garden leave).
Element Amount Commentary
Basic salary £467,833 during the year – Mr Thiam received a basic salary increase of £14,000 (3.5%)
As at 1 January £400,000 from 1 April and a further increase in May when appointed an
As at 31 December £500,000 executive director.
Annual Bonus No payment was made – Given his voluntary resignation, Mr Thiam received no bonus in
Plan (ABP) to Mr Thiam in respect respect of 2007.
of 2007 performance – On his final departure Mr Thiam will receive those shares from
the 2005 DBP award that are his by right under the scheme rules.
The matching shares provided by the Company will lapse. He will
forfeit his total 2007 ABP deferral and will receive that portion
from the 2006 ABP deferral (50%) to which he is entitled under
the scheme rules, whilst the remaining 50% balance will be
forfeited.
LTIP – face value £600,000 – The face value of the grant represented 150% of Mr Thiam’s
of grant (forfeited on resignation) basic salary on 28 February 2007.
– On his resignation his 2007 award and the unvested 2005 and
2006 awards were forfeited.
Other benefits £13,300 cash car allowance
Private medical insurance
Annual Bonus Plan (ABP) – target setting
The financial targets which underpin the ABP (accounting for 50% of annual bonus) are derived from Aviva’s return,
growth and capital efficiency/capital generation goals. Two of the financial targets (operating profit and new business
contribution) are “stretched” due to their importance in achieving these aspirations.
Employee and customer targets (each accounting for up to 10% of annual bonus) are set taking into account
performance to date and aspirations for the future. The employee targets on leadership and engagement are derived
from the Group’s global climate survey in which all business units participate and which over 42,000 staff completed in
2007. This survey is delivered through an independent third party able to provide extensive external benchmark data.
Our current aim is to reach the relevant global and national norms on leadership and engagement. Our aspiration is to
be at the upper quartile positions over time.
The ABP replaced the Aviva Deferred Bonus Plan (DBP), which was approved by shareholders in 2001 and provided for a
one-for-one match on deferred awards. Vesting of awards is not subject to any further performance conditions and takes
place on the third anniversary from grant. Final awards were made under the DBP in respect of the 2004 financial year in
March 2005 and will vest in 2008.
Our customer metrics do not yet have the same degree of consistency and external comparability in all business units
as our employee climate survey. Different methodologies and measures are used in different parts of the business.
We already derive suitable performance targets from available data and are working to establish greater consistency
and external comparability.
Internal assurance that the outcomes on employee and customer targets were accurately calculated and reported was
provided to the Committee by Group Audit.
Personal objectives based on delivery of key strategic priorities, personal leadership and operating performance of the
relevant portion of the business account for up to 30% of annual bonus.
The Group’s performance against its financial, employee and customer KPIs in 2007, as they affected the bonus of the
Chief Executive, is shown in the table below.
Weighting (% of total bonus opportunity)
Actual
Key performance indicators On target (%) Stretch (%) payment (%)
ROCE (external) 331.5
Operating profit (EEV/IFRS) 6 20 –
Operating profit (IFRS) 3 3 –
PVNBP 333.0
New business contribution 4 15 15.0
IRR 333.0
COR – GI and health 3 3 –
Customer 5107.8
Employee 5107.7
Personal – individual strategic 15 30 26.7
Total 50 100 64.7