Aviva 2009 Annual Report Download - page 103

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Performance review
Aviva plc Directors’ remuneration report continued
Corporate responsibility
Annual Report and Accounts 2009
Governance
Shareholder information
Financial statements IFRS
Financial statements MCEV
Other information
Committee activities during 2009
The Committee is required by its terms of reference to meet at least three times per year and has a standing calendar of items
within its remit. In addition to these standing items, the Committee discusses matters relating to the operation of the remuneration
policy and emerging market practices. In 2009, the Committee met eight times and discussed, amongst others, the issues set out
in Table 2 below:
Table 2: Matters discussed by the Committee during its 2009 meetings
Meeting Standing agenda items Other agenda items
February — A review of EDs’ basic salaries and benefits in kind — Assurance of non-financial bonus targets
— Consideration and approval of EDs’ bonus awards for 2009 and
approval of share awards under the Annual Bonus Plan (ABP)
— A review and approval of Long Term Incentive Plan (LTIP) grants
to the EDs and approval of the performance conditions for the
2009 grants
— A performance test of subsisting LTIP grants
— A decision on the operation of the UK’s All Employee Share
Ownership Plan and the Aviva Ireland’s All Employee Share
Ownership Plan
— A review of dilution limits
— A review and approval of recommendations on contributions into
the Aviva Capital Accumulation Plan (ACAP)
— Approval of the 2008 Directors’ Remuneration Report
— Approval of the 2009 One Aviva Twice The Value Bonus Plan
(OATTV) grants
— EDs’ shareholding requirements
Governance
June — None — Approval of the departure terms of Philip Scott
August — A review of EDs’ bonus targets following a rebase for exchange rates — Consideration of EDs’ 2009 bonus targets
and capital assumptions — Committee Terms of Reference
— Approval of an invitation to UK and Irish employees to participate in — LTIP and OATTV Plan performance testing for the
the Savings Related Share Option Schemes (SAYE) Australian participants following the decision to
sell the business
— EDs’ shareholding requirements — Update on governance and regulatory
developments
— Consideration of the impact of the Finance Act
2009 on remuneration
September — None — Approval of Andrea Moneta’s appointment terms
as an ED
October — None — Approval of Mark Hodges’ remuneration following
the expansion of his responsibilities
— Approval of Patrick Regan’s appointment terms as
an ED from February 2010
— Review remuneration changes for relevant
members of the Executive Committee following
new appointments and changes to responsibilities
December — Approval of the proposed 2010 financial, employee and customer
targets for the operation of the ABP
— Comment upon and noting of the EDs’ personal objectives for 2010
— A review of the proposed approach to the 2009 Directors’
remuneration report
— A review of the Committee’s 2010 work plan
— A review and update of proposed governance and
regulatory changes
— Review of the workplan for the 2010 Strategic
Reward Review
— Approve proposals for changes to two share
incentive plans, as a result of the 2009
Finance Act
Committee Decisions
The Company’s EDs elected to take a basic salary freeze in 2009 and to take a 10% reduction on the personal element of their
annual bonus. A further 45 members of senior management similarly accepted a 2009 basic pay freeze. The 2008 Annual Report
and Accounts stated the Committee had decided to review mid year the financial targets used for bonus purposes for EDs and
other senior managers. This was in addition to the mechanical rebasing for exchange rate and capital assumptions that is carried
out annually. Only in exceptional circumstances would the Committee consider amending financial targets, either up or down, and
any significant change would be the subject of appropriate consultation. Having reviewed the targets, it was agreed that they
remained valid and therefore the bonuses paid for the 2009 performance year, which are disclosed in this report, are based on
unaltered financial and non-financial targets.
The Committee remains conscious of the shareholders’ loss of value in light of the recession. This has also impacted the EDs
through the significantly lower value of the deferred ABP shares and LTIP grants in 2007, both of which will vest in 2010.