Aviva 2013 Annual Report Download - page 93

Strategic report Governance IFRS Financial statements Other information
Aviva plc
Annual report and accounts 2013
91
Directors’ remuneration report continued
Employment contracts and letters of appointment
ED employment contracts and NED letters of appointment are available for inspection at the Company’s registered office during
normal hours of business, and at the place of the Company’s 2014 AGM from 10.45 am on 30 April 2014 until the close of the
meeting.
The key employment terms and conditions of the current EDs, and those who served during the year, as stipulated in their
employment contracts, are set out in table 2 below.
Table 2: Executive directors’ conditions of employment
Provision Polic
y
Notice period
By the ED
By the Company
6 months.
12 months, rolling. No notice or payment in lieu of notice to be paid where the Company terminates for cause.
Termination payment Pay in lieu of notice up to a maximum of 12 months’ basic salary.
Any payment is subject to phasing and mitigation requirements. An ED would be expected to mitigate the loss
of office by seeking alternative employment. Any payments in lieu of notice would be reduced, potentially to
zero, by any salary received from such employment.
In the case of Mark Wilson, if his employment were to be terminated by the Company, other than for cause,
within three years of his appointment then he would be entitled to be reimbursed against evidenced expenditure
for reasonable and appropriate costs incurred in relocating outside the UK up to a maximum of £100,000,
inclusive of any tax liability.
Remuneration and benefits The operation of the annual bonus and LTIP is at the Company’s discretion.
Expenses Reimbursement of expenses reasonably incurred in accordance with their duties.
Car allowance A cash car allowance is received, as varied from time to time.
Holiday entitlement 30 working days plus public holidays.
Other benefits Other benefits include private medical insurance and participation in the Company’s staff pension scheme.
As disclosed in 2012, were the current Group CEO to incur additional reasonable relocation expenses above
the £200,000 limit set out in the annual remuneration report section, then the committee would consider
reimbursement of those expenses up to an agreed further limit.
Private medical insurance Private medical insurance is provided for the ED and his family. The ED can choose to opt out of this benefit or
take a lower level of cover. However, no payments are made in lieu of reduced or no cover.
Sickness 100% of basic salary for 52 weeks, and 75% thereafter for a further 52 weeks.
Non-compete During employment and for six months after leaving without the prior written consent of the Company.
Contract dates Director:
Mark Wilson
Patrick Regan1
Trevor Matthews2
Date current contract commenced:
1 January 2013
22 February 2010
2 December 2011
Notes
1 Patrick Regan tendered his resignation as CFO on 22 January 2014 and will leave the Board and the Group before the AGM.
2 Trevor Matthews resigned from the Board with effect from 8 May 2013 and left the Company on 6 June 2013.
Policy on payment for loss of office
There are no pre-determined ED special provisions for compensation for loss of office. The committee has the ability to exercise its
discretion on the final amount actually paid but any compensation would be based on what would be paid by way of basic salary,
pension entitlement and other contractual benefits during the notice period depending on whether notice is worked or a payment
made in lieu of notice.
Where notice of termination of a contract is given, payments to the ED would continue for the period worked during the notice
period. Alternatively, the contract may be terminated and phased monthly payments made in lieu of notice for, or for the balance
of, the 12 months’ notice period. During this period, EDs would be expected to mitigate their loss by seeking alternative
employment. Payments in lieu of notice would be reduced by the salary received from any alternative employment, potentially
to zero. The Company would typically make a contribution towards an EDs legal fees in connection with advice on the terms of
their departure.
There is no automatic entitlement to an annual bonus for the year in which loss of office occurs. The committee may
determine that an ED may receive a pro rata bonus in respect of the period of employment during the year loss of office occurs
based on an assessment of performance. Where an ED leaves the Company by reason of death, disability or ill health, or any
other reason determined by the committee, there may be a payment of a pro rata bonus for the relevant year at the discretion
of the committee.
The treatment of leavers under our ABP and LTIP is determined by the rules of the relevant plans. Good leaver status under
these plans would be granted in the event of, for example, the death of an ED, or their departure on ill health grounds. Good
leaver status for other leaving reasons is at the discretion of the committee, taking into account the circumstances of the
individual’s departure, but would typically include planned retirement. In circumstances where good leaver status has been
granted, awards may still be subject to a reduction prior to vesting in the event that inappropriate conduct of the ED whilst an
employee is subsequently discovered post departure.
In the case of the long-term incentive plans, where the committee determines EDs to be good leavers, vesting is normally
based on the extent to which performance conditions have been met at the end of the relevant performance period, and the
proportion of the award that vests is pro-rated for the time from the date of grant to final date of service (unless the committee
decides otherwise).