Aviva 2014 Annual Report Download - page 97

Aviva plc Annual report and accounts 2014
93
Table 1: Remuneration policy for Executive Directors
–
overview
Element
Purpose and link to
strategy
Operation and recovery provisions
(if applicable) Maximum opportunity Performance measures
Long-term
incentive
plan
To motivate EDs to achieve
the Company’s longer-term
objectives, to align EDs’
interests with those of
shareholders and to aid the
retention of key personnel.
Shares are awarded which vest dependen
t
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.
Shares are typically subject to a two year
holding period after vesting, creating a total of
five years between the award being granted,
and the first opportunity to sell.
Awards are subject to malus and clawback.
Details of when these may be applied are set
out in the notes below.
The committee has discretion to amend vesting
levels to prevent unreasonable outcomes,
which it may use taking into account a range of
factors, including the management of risk and
good governance and, in all cases, the
experience of shareholders.
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
Return on Equity (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.
If suitable employee contributions are
made, employer contributes 28% of
basic salary (into pension or as cash as
applicable).
N/A
Benefits To provide EDs with a
suitable but reasonable
package of benefits as part
of a competitive
remuneration package. This
involves both core
executive benefits, and the
opportunity to participate
in flexible benefits
programmes offered by the
Company (via salary
sacrifice).
This 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 appropriate against
comparable roles in companies of a
similar size and complexity to provide
a reasonable level of benefit.
Costs 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
disclosed 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 reassigned
from one location to another receive relevant
benefits to assist them and their dependants in
moving home and settling in to the new
location.
Dependent on location and
f
amily
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 300% of basic salary
for the Group CEO and 150% of basic salary
for other EDs.
This shareholding is normally to be built up over
a period not exceeding 5 years (subject to the
committee’s discretion where personal
circumstances dictate).
N/A N/A
Governance
Aviva plc Annual report and accounts 2014 |93