Aviva 2007 Annual Report Download - page 97
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Please find page 97 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
93
Governance
This report sets out the remuneration policy for the Company’s directors, describes its implementation and discloses the
amounts paid in 2007. In addition to meeting statutory requirements, particularly the Companies Act 1985, Schedule 7A,
the Remuneration Committee (the “Committee”) has aimed to comply with best practice guidelines, including guidance
produced by the Association of British Insurers (ABI) and the National Association of Pension Funds, in producing this
report.
The Remuneration Committee
The Committee is a committee of the Board. The terms of reference for the Committee are available from the Group
Company Secretary and can be found on the Company’s website. The Committee’s key objectives are to:
– Establish a competitive remuneration package to attract, retain and motivate scarce, high quality leaders;
– Promote the achievement of both our annual plans and our strategic objectives and ambitions by providing a
remuneration package that contains appropriately motivating targets; and
– Align senior executives’ remuneration with the interests of shareholders and other stakeholders, including customers
and employees.
Within the context of these objectives, the Committee’s main responsibilities are to:
– Recommend to the Board the Group’s remuneration policy for the executive directors and members of senior
management, covering basic salary, bonus, long term incentives, retirement provision, long term wealth creation
and other benefits;
– Strike an appropriate balance between (i) the fixed and variable and (ii) the cash, equity and equity related components
of the total remuneration package;
– Ensure the remuneration package is congruent with and provides the incentives to realise short and long term goals;
– Review and determine the terms of employment and remuneration of the individual executive directors, including any
specific recruitment or severance terms;
– Review and, within the broad policy from time to time approved by the Board, determine the remuneration terms of
the Chairman of the Board;
– Recommend to the Board the establishment of any employee share plans and exercise all the Board’s powers in relation
to the operation of all share and incentive plans, including the granting of awards, the setting and testing of
performance conditions (where appropriate), and any discretion on behalf of the Board regarding any material
amendments to the plans’ rules not requiring the approval of shareholders; and
– Select, appoint and determine terms of reference for independent remuneration consultants to advise the Committee
on remuneration policy and levels of remuneration.
Remuneration Committee membership
The following independent non-executive directors served on the committee during the year:
Period
Members From To
Richard Karl Goeltz (Chairman from January 2006) 3 May 2004 To date
Mary Francis 25 January 2006 To date
Carole Piwnica 25 January 2006 To date
Scott Wheway 5 December 2007 To date
The Committee meetings are attended by Andrew Moss, Group Chief Executive (other than when his own remuneration
is being discussed) and John Ainley, Group Human Resources Director. The Group Company Secretary acts as secretary to
the Committee. The Chairman attends when discussing the remuneration of the Group Chief Executive.
The Committee is advised by David Hope, Group Human Resources Strategy Director, on market practice and the
alignment of reward arrangements to business strategy and by Tim Harris, Group Chief Accountant, on matters
relating to the performance measures and targets for the Group’s incentive plans. In addition, the Committee appointed
New Bridge Street Consultants (NBSC) to advise on a review of senior executive remuneration (see below). NBSC
provided no other material assistance to the Company in 2007. Deloittes LLP, which provided other services to the Group
in 2007, advised the Committee on the calculation of Total Shareholder Return (TSR) in respect of the Long Term
Incentive Plan (LTIP) vesting. The Group Company Secretary and Linklaters LLP (Linklaters) advised the Committee in
relation to the operation of the Company’s share plans. Linklaters provided other legal services to the Company
during 2007.
In line with Combined Code requirements, the Board undertook a review of the effectiveness of the Committee during
the year. Additionally, the Committee reviewed its own performance and agreed steps to enhance its effectiveness.
Directors’ remuneration report