Aviva 2009 Annual Report Download - page 111

109
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
The same targets will apply for the 2010 LTIP awards. The comparator group will remain unchanged other than the removal of
Friends Provident which will be replaced by Resolution Limited. The Committee has agreed a shortlist of companies that would be
considered for inclusion in the comparator group, subject to final review, should any further member of the group be delisted.
Details of subsisting LTIP awards are provided on page 110 and Table 9 below shows the vesting projections (non-audited) of
those awards as at 31 December 2009.
Table 9: Projections of vesting of subsisting LTIP awards
LTIP Award 31 December 2009 vesting projection (% of award)
Aviva LTIP 2009 50%
Aviva LTIP 2008 50%
Aviva LTIP 2007 50%
Details of the assumptions used in valuing the LTIP for accounting purposes can be found on page 202 of this report. The vesting
assumption made in respect of the 2010 award for accounting purposes is 50%.
Since the LTIP has performance conditions attached to it, then one potential outcome is that neither performance condition is
met and the whole of the LTIP lapses. Table 10 below has been drawn up to assist in understanding the potential value of the LTIP
awards made to EDs in 2010 should the performance conditions be met in part or in whole.
Table 10: Potential value of 2009 LTIP awards (rounded to nearest £50)
LTIP Andrew Moss Philip Scott Mark Hodges Andrea Moneta*
£ £ £ £
Face Value of grant 1,618,750 900,000 780,000 756,900
Threshold Vesting 485,600 270,000 234,000 227,100
Expected Value 936,950 520,900 451,500 438,100
Maximum Vesting 2,154,550 1,197,900 1,038,200 1,007,500
* Figures shown for Mr Moneta have been converted from Euro to Pound Sterling at the average exchange rate for 2009 of €1.12297:£1.00
Assumptions are as follows:
— Threshold vesting assumes TSR and ROCE elements vest at the minimum level, producing a 30% vesting of the total award.
No share price growth is assumed;
— Expected value, based on the vesting assumption made for accounting purposes, assumes TSR and ROCE elements vest at a
combined rate of 50% of the total award. Share price growth of 5% per annum is assumed over the three-year performance
period;
— Maximum vesting assumes both TSR and ROCE elements vest in full, producing a 100% vesting. Share price growth of 10% per
annum is assumed over the three-year performance period.
Andrea Moneta joined Aviva in July 2008 and does not have an LTIP award vesting in 2010.
At the end of the performance period for the 2006 LTIP grant, which vested in 2009, the Company was ranked eighth out
of the 15 companies in the TSR comparator group (15% vesting) and ROCE was 36.0% (41.3% vesting). The total vesting was
therefore 56.3%. The 43.7% of the award which did not vest lapsed.
The LTIP vesting history is set out in Table 11 below. Prior to the 2005 award, vesting history is based on an earlier LTIP plan,
and the last award made under this plan was in 2004.
Table 11: Vesting history of LTIP awards
Percentage of award vesting
Year of grant Performance period ROCE TSR Total
2002 January 2002 to December 2004 23.3 23.0 46.3
2003 January 2003 to December 2005 30.0 34.9 64.9
2004 January 2004 to December 2006 30.0 34.9 64.9
2005 January 2005 to December 2007 50.0 0.0 50.0
2006 January 2006 to December 2008 41.3 15.0 56.3
Aviva does not award additional shares for the dividends that were paid during the three-year performance period on those shares
that vest.
Governance