Aviva 2013 Annual Report Download - page 66

Aviva plc
Annual report and accounts 2013
64
Extract of directors’ remuneration report
Dear shareholder
On behalf of the Board, the Remuneration Committee
is pleased to present an extract of the Directors’
Remuneration Report (DRR) for the year ended
31 December 2013.
Responding to new requirements
Aviva’s 2013 DRR reects the new reporting
requirements introduced by the Department
for Business, Innovation & Skills regulations.
We have endeavoured to reect the letter
and the spirit of those new requirements in
the DRR. We have drawn on the guidance,
notably by the GC100 Investor Group, in
its preparation.
In addition, we have consulted widely with
shareholders on the contents of our new
directors’ remuneration policy and, following
consideration of their comments, we have made
a number of amendments in this nal version.
Paying for performance
We believe there is a clear link between the
performance of the Group, the value we add for
shareholders and the remuneration of our most
senior executives. Our remuneration policy and
practice reects performance against the Group’s
main strategic priorities, which are:
§Improve nancial performance – total
remuneration is heavily weighted towards pay
dependent on outcomes against the Key
Performance Indicators (KPIs) of our business,
notably cash ow, prot and Return On
Equity (ROE)
§Build capital and nancial strength – the
expenditure on variable pay is very much
aligned to the measurement of the nancial
strength of our business. The Remuneration
Committee assures itself that any bonus
proposed is justifable based on the business
being sustainable over the long term
§Focus on core businesses – through the
measurement of a number of key nancial,
operational and longer-term return measures,
overall remuneration is closely aligned to the
achievement of the Group’s strategic objectives
Our reward approach in practice
The application of our policies and practices
in the 2014 reward round has resulted in the
following outcomes for the Group Chief
Executive Ofcer (Group CEO):
§Basic pay – basic salary of £980,000 will
remain unchanged
§Annual bonus – a 2013 bonus of 112.5% of
basic salary, equivalent to £1,102,500 was
approved. The basis for this decision is set out
in the remuneration report in the annual report
and accounts
§Long-Term Incentive Plan (LTIP) – an LTIP grant
in 2014 with a face value of £2,940,000 which
is 300% of basic salary
Appointment of new CFO
The Board announced on 28 February 2014 the
appointment of Tom Stoddard as CFO. Mr
Stoddard will join on 5 May 2014. Details
of his remuneration arrangements were included
in the announcement of his appointment, and
are set out in the DRR.
Continuing the shareholder dialogue
We have met our major institutional shareholders
and the main proxy agencies regularly in the
course of 2013.
We believe this regular contact is proving
benecial for both parties in increasing mutual
understanding, addressing and resolving issues
of concern and helping informed decision
making. We remain committed to continuing
that dialogue.
Remuneration reward review
Our remuneration policy report reects our
reward framework as we will apply it for senior
executive remuneration in 2014.
Usual practice would be that our remuneration
policy is put to a vote every three years, although
we expect to conduct a strategic review of our
executive remuneration in 2014 to ensure our
reward frameworks, policies and practices remain
t for purpose, aligned with the wider talent
market and compliant with relevant regulation.
If that review leads to proposed changes to our
remuneration policy, we expect to consult with
shareholders in the latter half of 2014.
Subject to the outcomes of that consultation,
we will aim to put proposals to shareholders at
our 2015 Annual General Meeting (AGM)
for approval.
Patricia Cross
Chairman, Remuneration Committee