Aviva 2009 Annual Report Download - page 114

112
Aviva plc Directors’ remuneration report continued
Annual Report and Accounts 2009
External Board appointments
Aviva recognises its senior executives can benefit from serving in a personal capacity as a NED of non Aviva Group companies. It is,
at the same time, conscious of the corporate governance recommendations that EDs should take account of the time commitment
required by a NED position and ensure any such role does not impact their ability to carry out fully their executive duties. The
Company therefore has a policy of normally allowing senior executives to serve as a NED of one external company, subject to
approval by the Board, and to retain any board fees.
The only ED who held an external NED appointment during 2009 was Philip Scott who was appointed to the Board of Diageo
plc on 17 October 2007 and, following the announcement of his intended retirement from the Company, to the Board of Royal
Bank of Scotland Group plc on 1 November 2009. As a NED of Diageo plc, Mr Scott received fees totalling £101,250 in 2009.
As a NED of Royal Bank of Scotland Group plc, Mr Scott received fees totalling £25,000 in 2009.
All employee share plans
EDs are eligible to participate in a number of HMRC approved all employee share plans on the same basis as other eligible
employees.
These plans include a free share element of the Aviva All Employee Share Ownership Plan (AESOP). Under this plan, eligible
employees can receive up to a maximum of £3,000 per annum in shares based upon the profits of the Company’s UK businesses.
The shares are free of tax subject to a retention period. In addition, the partnership element of the AESOP, which the Company
also operates, allows participants to invest up to £125 per month out of their gross salary in the Company’s shares. There is no
matching to this investment by the Company.
The Aviva SAYE allows eligible employees to acquire options over the Company’s shares at a discount of up to 20% of their
market value at the date of grant. In order to exercise these options, participants must have saved through a three, five or seven-
year HMRC approved savings contract, subject to a maximum savings limit of £250 per month.
Details of holdings under these plans can be found on page 115.
Dilution
Awards granted under the Aviva employee shares plans are met by the funding of an employee trust administered by an external
trustee that acquires shares in the market. The current practice is that new issue shares will generally only be issued where it is not
practicable to use the trust and the funding policy is kept under review by the Committee and the Board. Details of the shares
currently held in the employee trust are set out in note 30 to the accounts.
During 2009 loans totalling of £53.6 million were made to RBC Trustees (CI) Limited to ensure sufficient shares were available
to meet its ongoing liabilities.
NEDs
The NEDs, including the Chairman, have letters of appointment which set out their duties and responsibilities. The key terms of the
appointments are set out in Table 15 below.
Table 15: NED key terms of appointment
Provision Policy
Period Three-year term which can be extended by mutual consent.
Termination By the director or the Company at their discretion without compensation.
Fees As described below.
Expenses Reimbursement of travel and other expenses reasonably incurred in the performance of their duties.
Time commitment Between 25 and 50 days per annum depending upon Board and committee requirements and corporate
activity.
Non-compete During term of directorship and for six months after leaving.
Appointment dates Director
Mary Francis
Richard Karl Goeltz
Euleen Goh
Carole Piwnica
Lord Sharman
Leslie Van de Walle
Russell Walls
Scott Wheway
Date of last appointment on letter
of appointment
1 October 2008
3 May 2007
1 January 2009
30 May 2009
14 January 2008
6 May 2009
3 May 2007
5 December 2007
Appointment end date on letter of
appointment
AGM 2012
AGM 2010
AGM 2011
AGM 2012
AGM 2011
AGM 2010
AGM 2010
AGM 2010
It is the Company’s policy to set the fees paid to its Chairman and NEDs taking account of the median market payments in
international companies of similar size and complexity. NEDs receive a basic annual fee in respect of their Board duties. A further
fee is paid to NEDs (other than the Chairman) in respect of membership and, where appropriate, chairmanship of Board
committees.
Fees are reviewed annually and are set by the Board to attract individuals with the required range of skills and experience. In
determining the level of fees paid to the NEDs the Board receives recommendations from the EDs, who consider the NED’s duties
and responsibilities, together with the time commitment required in preparing for and attending meetings, and the amounts paid
by competitors and similar-sized companies.