Aviva 2009 Annual Report Download - page 113

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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
Performance graph
Table 13 below compares the TSR performance of the Company over the past five years with the TSR of the FTSE 100 Return
Index. This index has been chosen because it is a recognised equity market index, of which Aviva is a member.
The companies which comprise the current LTIP comparator group for TSR purposes were chosen on the basis of product
and geographic match to Aviva and are listed above. The TSR graph for the comparator group has been plotted using the 20
companies (including Aviva) in the comparator group for pre-2005 grants, the 15 companies (including Aviva) in the comparator
group for 2005-07 grants, the 16 companies (including Aviva) in the comparator group for the 2008 grant, and the 15 companies
(including Aviva) in the comparator group for the 2009 grant.
Table 13: Aviva plc five-year TSR performance against the FTSE 100 Index and the comparator group
Aviva FTSE 100 Comparator Group Median
TSR (rebased to 100)
150
100
Dec 05 Dec 06 Dec 07 Dec 08 Dec 09
EDs’ service contracts
Service contracts agreed with each ED incorporate their terms and conditions of employment. Contracts were last reviewed during
2006 bringing them in line with good market practice. The aim is to strike a fair balance between the Company’s and the
employee’s interests taking into account good market practice. The key terms are set out in Table 14 below.
Table 14: EDs’ key terms and conditions of employment
Provision Policy
Notice period
By the director 6 months
By the Company 12 months, rolling. No notice or payment in lieu to be paid where the Company terminates for cause.
Termination payment Pay in lieu of notice up to a maximum of 12 months’ basic salary. This may be increased by a discretionary
redundancy payment (where appropriate) but any such further termination payment is capped at 12 months’
basic salary.
Any amount is subject to phased payment and mitigation requirements.
Remuneration and benefits As described in this Report the operation of the ABP, the OATTV Plan and LTIP is at the Company’s discretion and,
in the case of the long-term savings plans, at the trustees’ discretion.
Expenses Reimbursement of expenses reasonably incurred in accordance with their duties.
Holiday entitlement 30 working days plus public holidays.
Sickness In line with senior management terms, ie 100% basic salary for 52 weeks, and 75% thereafter.
Non-compete During employment and for six months after leaving.
Contract dates Director Date current contract commenced
Andrew Moss 1 January 2007
Philip Scott 15 November 2006
Mark Hodges 26 June 2008
Andrea Moneta 29 September 2009
Share ownership requirements
An internal shareholding requirement was introduced in 2005 that the Group Chief Executive and any EDs should build, over a
five-year period, a shareholding in the Company equivalent to 175% of basic salary and 150% of basic salary respectively and no
specific value per share was designated for the calculation. Shares held in compulsory bonus deferrals and performance shares held
in unvested LTIPs are not taken into account in applying this test.
As at 31 December 2009, based on that day’s closing share price of 397.9p, Mr Moss’ shareholding of 239,848 shares
represented 103% of his basic salary of £925,000 (his holding of 176,067 shares at 1 January 2009 represented 76% of his basic
salary of £925,000 using the 31 December 2009 share price). As it currently stands, largely due to the volatile market conditions in
the current economic climate, Mr Moss will not meet the internal shareholding requirement target of 1.5 x his salary by April 2010,
although he is on target to meet the 1.75 x his salary by July 2012. Mr Scott’s shareholding of 512,652 shares represented 340%
of his basic salary of £600,000 (his holding of 400,973 shares at 1 January 2009 represented 266%). Mr Hodges’ shareholding of
139,028 shares represented 106% of his basic salary of £520,000 (his holding of 100,086 shares at 1 January 2009 represented
77%). Mr Moneta’s shareholding of 394 shares represented 0% of his basic salary of €780,000 (£694,587 based on average
exchange rate for 2009 of €1.12297: £1.00).
Governance