Aviva 2013 Annual Report Download - page 90

Aviva plc
Annual report and accounts 2013
88
Directors’ remuneration report continued
Table 1: Remuneration policy for executive directors – overview
Element Purpose and link to strate
gy
Operation and recovery provisions
(if applicable) Maximum opportunit
y
Performance measures
Long-term
incentive plan
(LTIP)
To motivate EDs to achieve
the Company’s longer-term
objectives, to align ED’s
interests with those of
shareholders and to aid the
retention of key personnel.
Shares are awarded which vest
dependent on the achievement of
performance conditions over a
three year period. Additional shares
are awarded at vesting in lieu of
dividends on any shares which vest.
Unvested awards are subject to
reduction in the event of
misconduct or materially adverse
misstatement of accounts.
The committee has discretion
to amend vesting downwards
depending on business or
individual performance or conduct.
The plan rules allow for
awards to be made up to a
maximum of 350% of basic
salary.
Threshold performance would
result in a vesting level of 20%
of maximum.
Performance below threshold
on both targets would result in
the award lapsing in its
entirety.
Currently, performance
targets over three
years are:
 50% vest based on
targets for absolute
ROE performance
 50% vest based on
relative Total
Shareholder Return
(TSR) against a
comparator group
Actual targets for ROE
and the appropriate TSR
comparator group are
agreed by the committee
annually and disclosed in
the annual remuneration
report section.
Pension To give a market competitive
level of provision for post-
retirement income.
EDs are eligible to participate in a
defined contribution plan up to the
annual limit. Any amounts above
the annual or lifetime limits are
paid in cash.
The level of benefit takes
account of the seniority of
EDs and of the local market.
Ordinarily, the employer
contribution to pension
benefits under UK contracts
does not exceed 31% of basic
salary, minus an employee
contribution of 8% of the
“Scheme Specific Earnings
Cap” (£141,600 for 2013/14).
N
/
A
Benefits To provide EDs with suitable
core benefits as part of a
competitive remuneration
package, which enables us to
attract and retain the right level
of talent necessary to deliver
the Company’s strategy.
Benefits are provided on a market
related basis. The Company
reserves the right to deliver benefits
to EDs depending on their
individual circumstances, which
may include a cash car allowance,
life insurance and private medical
insurance. In the case of non-UK
executives, the committee may
consider additional allowances
in line with standard relevant
market practice.
EDs employed under UK contracts
are eligible to participate in any
HMRC approved all employee share
plans operated by the Company on
the same basis as other eligible
employees.
Set at a level which the
committee considers is
appropriate against
comparable roles in companies
of a similar size and complexity
to provide a reasonable level
of benefit.
Cost would normally be
limited to providing a cash car
allowance, private medical
insurance, life insurance, and
reasonable travel benefits,
including the tax cost where
applicable. In addition, there
may be one-off or exceptional
items on a case by case basis,
which would be reported in
the DRR.
N
/
A
Relocation &
mobility
To assist with mobility across
the Group to ensure the
appropriate talent is available
to execute strategy locally.
Employees who are relocated or
re-assigned either in country or
internationally receive relevant
benefits to assist them and their
dependants in moving home and
settling in to the new location.
Dependent on location and
family size, benefits are market
related and time bound. They
are not compensation for
performing the role but to
defray costs of a relocation
or residence outside the
home country.
The committee would pay
no more than it judged
reasonably necessary, in the
light of all applicable
circumstances.
N/A
Shareholding
requirement
To align EDs interests with
those of shareholders.
A requirement to build a
shareholding in the Company
equivalent to 200% of basic salary
for the Group CEO and 150% of
basic salary for other EDs.
N/A N/A