Aviva 2013 Annual Report Download - page 103

Strategic report Governance IFRS Financial statements Other information
Aviva plc
Annual report and accounts 2013
101
Directors’ remuneration report continued
Relative importance of spend on pay
The table below outlines adjusted operating profit before tax attributable to shareholders’ profits after integration and
restructuring costs, dividends paid to shareholders and buybacks compared to overall spend on pay (in total and per capita). The
measure of profit has been chosen as a straightforward measure reflecting the performance of the Company, showing both gross
income, and also taking into account integration and restructuring costs.
Table 19: Relative importance of spend on pay
Year end
31 December 2012
£m
Year end
31 December 2013
£m % change
Adjusted operating profit before tax1 1,577 1,686 7%
Dividends paid2 757 429 (43)%
Share buybacks3 — — —
Total staff costs4 1,966 1,671 (15)%
Notes
1 Operating profit before tax attributable to shareholders’ profits for continuing operations after integration and restructuring costs.
2 The total cost of ordinary dividends paid to shareholders.
3 There were no share buybacks in 2012 or 2013.
4 Total staff costs from continuing operations includes wages and salaries, social security costs, post-retirement obligations, profit sharing and incentive plans, equity compensation plans and termination benefits. The average number
of employees in continuing operations was 33,589 (2012) and 29,970 (2013).
External Board appointments
The Company recognises that its EDs can benefit from serving in a personal capacity as a non-executive director of a non-Aviva
Group company. At the same time, it is conscious of the corporate governance recommendations that EDs should take account of
the time commitment required by a non-executive director position and ensure that any such role does not impact their ability to
carry out fully their executive duties. The Company therefore has a policy of normally allowing EDs to serve as a non-executive
director of one external company, subject to approval by the Board, and for the individual to retain any board fees.
Currently, Patrick Regan holds one external non-executive director appointment. He was, until the disposal of the Group’s
interests in Delta Lloyd N.V. in January 2013, a Company-nominated member on the supervisory board. He has continued to be
a member of the supervisory board in a personal capacity since that date. He received €62,227 during 2013 in respect of this
appointment.
Statement of directors’ shareholdings and share interests (audited information)
Executive directors share ownership requirements
The Company requires the Group CEO to build a shareholding in the Company equivalent to 200% of basic salary and each ED to
build a shareholding in the Company equivalent to 150% of basic salary.
The EDs are required to retain 50% of the net shares released from deferred annual bonuses and LTIPs until the shareholding
requirement is met.
Unvested share awards including shares held in connection with bonus deferrals are not taken into account in applying this
test. Table 20 below shows the position of each ED against the shareholding requirement as at 31 December 2013, based on that
day’s closing middle-market price of an ordinary share of the Company of 449.7 pence.
Table 20: Executive Directors – share ownership requirements
Shares held Options held
Shareholding
requirement
(% of salar
y
)
Current
shareholding1
(% of salar
y
)
Requirement
met Executive Directors
Owned
outri
g
ht2
Unvested and
subject to
performance
conditions3
Unvested
and subject
to continued
emplo
y
ment4
Unvested and
subject to
continued
emplo
y
ment
Vested
but not
exercised5
Mark Wilson 150,000 983,277 — — — 200 69 No
Patrick Regan 413,469 1,278,088 254,441 — 2,903 150 258 Yes
Trevor Matthews6 218,241 482,142 226,835 — — — — —
Notes
1 Based on the closing middle-market price of an ordinary share of the Company on 31 December 2013 of 449.7 pence.
2 Shares ‘Owned outright’ are the directors’ beneficial holdings in the ordinary shares of the Company including any shares held in trust under the AESOP, being shares purchased by them under the partnership element of the AESOP
and any shares granted under the free share or matching share element of the AESOP. This information includes holdings of any connected persons.
3 Shares ‘Unvested and subject to performance conditions’ are awards granted under the Aviva LTIP which vest only if the performance conditions are achieved.
4 Shares ‘Unvested and subject to continued employment’ are awards arising through the Aviva Annual Bonus Plan 2011. Under these plans, some of the earned bonuses are paid in the form of conditional shares and deferred for
three years. The transfer of the shares to the director at the end of the period is not subject to the attainment of performance conditions but the shares can be forfeited if the ED leaves service before the end of the period.
5 ‘Options vested but not exercised’ are options over shares granted under the Aviva SAYE Scheme. In respect of Patrick Regan, his Aviva SAYE Scheme option reached maturity on 1 December 2013 and he has six months from the
maturity date to exercise his option.
6 Trevor Matthews ceased to be a director of the Company with effect from 8 May 2013 and the information is shown as at this date.
There were no changes to the current directors’ interests in Aviva shares during the period 1 January 2014 to 4 March 2014.