Aviva 2014 Annual Report Download - page 105

Aviva plc Annual report and accounts 2014
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During the year, the committee received advice on executive remuneration matters from Deloitte LLP which is a member of the
Remuneration Consultants Group and adheres to its Code of Conduct. Deloitte LLP was appointed by the committee as its adviser with
effect from 4 December 2012 following a competitive tender process and reappointed with effect from 4 November 2013 following an
assessment by the committee of the quality of the advice provided. In addition, the Group received advice on remuneration matters,
taxation and other consulting services (including advice in relation to Solvency II) from Deloitte LLP during the year.
Deloitte LLP were paid fees totaling £137,245, during the year for the provision to the committee of advice on general HR and
remuneration matters, benchmarking advice on market practice and views on shareholder perspectives. Fees were charged on a time plus
expenses basis.
The committee reflects on the quality of the advice provided and whether this properly addresses the issues under consideration as
part of its normal deliberations. The committee is satisfied that the advice received during the year was objective and independent.
Committee activities during 2014
Whilst not mutually exclusive the categories shown on the chart to the right were areas
of focus for the committee during the year. The chart also shows how the committee
dedicated its time to these activities.
As previously set out in this report, a significant part of the committee’s work
programme during the year was dedicated to the SRR and consideration of shareholder
feedback following consultation. Other significant committee activities included:
Executive Directors’ and Group Executive Remuneration
The committee benchmarked, reviewed and set salaries for the Group CEO, CFO and GE
members from 1 April 2014. An assessment was conducted on the achievement of
targets for 2013 for annual bonus calculation and the performance conditions were
tested and reviewed for LTIP awards vesting in 2014.
A report from Internal Audit was received and considered by the committee following
an internal review of the adequacy and effectiveness of controls over the preparation,
validation and evaluation of financial and non-financial bonus metrics and noted that no
material issues had been identified. The 2014 LTIP performance conditions and awards
were approved. The committee also considered annual bonus targets for 2015.
Aviva Investors
The committee reviewed the detail and methodology for assessing the 2013 bonus pool
for Aviva Investors, approving the maximum bonus pool and allocations. Remuneration
proposals for 2014 were considered and approved, including formal approval of the
bonus targets and consideration of a new Aviva Investors LTIP.
Directors’ remuneration report
The committee reviewed the DRR for the year ended 2013 prior to its approval by the Board and subsequent approval by shareholders at
the 2014 AGM.
Hires and departures during 2014
During the year the committee also considered and reviewed the remuneration and buyout packages of senior hires, including GE
members, Aviva Investors senior management, and senior members of staff designated as Code Staff. The committee also reviewed
severance terms for members of senior management.
Chief Financial Officer
Patrick Regan tendered his resignation as CFO on 22 January 2014 and left the Board and the Group on 28 March 2014.
• Mr Regan continued to receive basic salary and benefits up to his agreed departure date. There was no payment in lieu of any balance
of his notice period
• He received no bonus in respect of 2013 or 2014. No LTIP award was made for 2014
• The deferred element of Mr Regan’s 2010 and 2011 bonuses lapsed on termination of his employment
• His 2011, 2012 and 2013 LTIP awards also lapsed on termination of his employment
Following Mr Regan’s departure, Mr Stoddard joined the Group and Board on 28 April 2014. Details of his remuneration were announced
in the 2013 DRR and are as follows:
• Basic salary – £675,000 per annum next subject to review in 2015
• Annual bonus – 75% of basic salary for target performance and up to 150% of basic salary for maximum performance. Two thirds of
any bonus awarded is currently required to be deferred into Aviva shares for three years. The bonus payable for target performance will
increase to 100% of basic salary for 2015, assuming the 2015 remuneration policy is approved
• LTIP – Eligible for an LTIP grant with a face value of up to 350% of basic salary. The LTIP is subject to performance conditions and vests
after three years to the extent that those conditions have been met. His 2014 grant will be at 225% of basic salary
• Buyout – On a strict “like for like” basis he will be eligible to receive a buyout up to a maximum level of £1 million gross to replace
deferred compensation he has forfeited on resignation from his previous employer
• Relocation expenses – He may claim reasonable relocation expenses up to a maximum of £200,000 (inclusive of any benefit in kind
liability that may arise) in respect of relocation from the US to the UK
• Benefits – A cash car allowance and Private Medical Insurance (PMI) cover for himself and his family
The LTIP and buyout awards mentioned above have not been made during 2014 as Mr Stoddard has been subject to share dealing
restrictions, due to the Friends Life transaction. The awards will be made during 2015 once these restrictions have been lifted.
Remuneration Policy/Governance/
Regulatory Issues/Reporting 16%
Senior Management Objectives/
Remuneration/Successon Planning 31%
Share plans operation/
Performance Testing/Targets 31%
Strategic Reward Review/
Shareholder Liaison 22%
Remuneration Committee –
allocation of agenda time
Governance
Aviva plc Annual report and accounts 2014 |101