Aviva 2013 Annual Report Download - page 101

Strategic report Governance IFRS Financial statements Other information
Aviva plc
Annual report and accounts 2013
99
Directors’ remuneration report continued
Return on equity targets
ROE targets determine the vesting of 50% of the LTIP award and are set annually within the context of the Company’s three-year
business plan. Vesting depends upon performance over the three-year period against a target return. The 2013 LTIP award ROE
targets are set out in table 14 below.
Table 14: 2013 LTIP ROE targets
Achievement of ROE tar
g
ets over the three-
y
ear performance period Percenta
g
e of shares in award that vests based on achievement of ROE tar
g
ets
Less than 41% 0%
41% 10%
Between 41% and 50% Pro rata between 10% and 50% on a straight line basis
50% and above 50%
ROE is calculated as the IFRS profit after tax and non-controlling interest, excluding the impact of investment variances and
economic assumption changes, over average IFRS equity (excluding pension scheme net surplus/deficit) attributable to the ordinary
shareholders of the Company.
Total shareholder return targets (audited information)
Relative TSR determines the vesting of the other 50% of the LTIP award. Performance of the 2013 grant will be assessed against
the following companies: Aegon, Allianz, Axa, CNP Assurances, Direct Line Group, Generali, Legal & General, MetLife, Old Mutual,
Prudential, Resolution Limited, RSA, Standard Life and Zurich.
TSR vesting operates as set out in table 15 below.
Table 15: TSR vesting schedule for the 2013 LTIP award
TSR position over the three-
y
ear performance period Percenta
g
e of shares in award that vests based on achievement of TSR tar
g
ets
Below median 0%
Median 10%
Between median and upper quintile Pro rata between 10% and 50% on a straight line basis
Upper quintile and above 50%
Payments to past directors (audited information)
Russell Walls retired from the Board with effect from 8 May 2013. Mr Walls was appointed as Chairman and Non-Executive
Director of Aviva Insurance Limited on 1 May 2013, a subsidiary company of Aviva plc and the emoluments he received in respect
of this directorship for the 2013 financial year were £72,328.
Richard Karl Goeltz retired from the Board with effect from 8 May 2013. Mr Goeltz was appointed as Chairman and Non-
Executive Director of Aviva Life Holdings UK Limited on 14 May 2013, a subsidiary company of Aviva plc and the emoluments he
received in respect of this directorship for the 2013 financial year were £71,250. On 13 February 2014, Mr Goeltz was also
appointed as a non-executive director of Aviva Life & Pensions UK Limited, Aviva Annuity UK Limited and Aviva Life Services UK
Limited, each of which are subsidiary companies of Aviva plc.
Payments for loss of office (audited information)
Trevor Matthews resigned from the Board with effect from 8 May 2013 and left the Company on 6 June 2013. His notice period
commenced on 7 February 2013.
Mr Matthews was paid only awards that were contractually required and no discretions were applied. This constituted full and
final settlement of Mr Matthews’ departure terms. Any new ED appointment would be in accordance with our remuneration policy
set out above.
 Mr Matthews received pay in lieu of notice for the balance of his notice period (8 months) of £480,000, paid in 8 equal
monthly instalments
 He received no bonus in respect of 2013, and no LTIP award was made for the year
 The deferred element of Mr Matthews’ 2011 bonus vested on termination of his employment. The value realised was £34,196
(9,528 shares, inclusive of shares awarded in lieu of dividends accrued, vesting at a share price of 358.9 pence)
 His 2011 and 2012 LTIP awards will vest at the end of the relevant performance period (March 2014 and March 2015
respectively). These will be pro-rated to reflect his service during the performance period and the extent to which the
performance conditions have been achieved at the end of the period. 104,278 phantom shares (not inclusive of shares
awarded in lieu of dividends accrued) will therefore vest in March 2014 and a maximum of 230,073 shares (not inclusive of
shares awarded in lieu of dividends accrued) will therefore vest in March 2015 depending on performance conditions on the
same basis as vesting for other directors
 Mr Matthews received the final tranche of his recruitment award (the “conditional share award” disclosed in the 2011 DRR),
which vested on his departure. The value realised was £877,360 (based on 244,458 shares, inclusive of shares awarded in lieu
of dividends accrued, vesting at a share price of 358.9 pence)
 Legal fees of £10,000 were paid to Mr Matthews’ solicitor in connection with advice on the terms of his departure