Boss of insurance firm Aviva steps down after shareholder revolt over pay
Shares in the FTSE 100 insurer rose more than 5 per cent following news
Moss's pay was poised to climb 6.7% to £2.64m, despite underperforming shares
Andrew Moss has bowed to investor pressure and stepped down from the helm at Aviva, becoming the latest casualty of shareholder revolt over corporate pay levels.
Shares in the FTSE 100 insurer rose more than 5 per cent on Tuesday after Mr Moss said he was resigning with immediate effect. His departure follows the rejection by shareholders last week of the group’s executive pay scheme.
Mr Moss is the third high-profile chief executive to fall victim to investor anger at the disconnect between executive remuneration and corporate performance, following the recent departures of Sly Bailey from Trinity Mirror and David Brennan from AstraZeneca.
John McFarlane, chairman designate, will become temporary executive deputy chairman and executive chairman from July 1 while the insurer searches for a permanent replacement.
Aviva on Tuesday said that Mr Moss had taken the decision to step down because “he felt it was in the best interests of the company that he step aside to make way for new leadership”.
The company said it would release the financial terms of his departure in a separate announcement.
Barrie Cornes, a Panmure Gordon analyst, said: “The move will be welcomed by shareholders and follows a number of events at Aviva that can at best be described as ‘unfortunate’.
“The shares should bounce today on the news of Mr Moss’s departure and could rally further if Andy Haste’s [ex chief executive of RSA] name becomes linked to the chief executive role.”
Mr Moss, 54, took over as chief executive of the UK’s second-largest insurer by market capitalisation in 2007.
Since his arrival, Aviva shares have more halved in value from more than 750p to about 300p. But on Tuesday following the news of Mr Moss’s departure they rose 5.4 per cent or 16.4p to 318.7p, making them the biggest gainers on the FTSE 100.
Almost six in 10 votes at last Thursday’s general meeting failed to back the pay policies put forward by the insurer – only the fourth such revolt at a UK blue-chip company since advisory votes were introduced in 2003.
Before the vote, a concession by Mr Moss to waive a proposed £46,000 rise in his base salary failed to appease investors.
Several large Aviva investors said they had used the vote to shine a spotlight on concerns over long-term underperformance and short-term pay excess.
Excluding a long-term share incentive plan worth up to £3.39m, Mr Moss’s pay was poised to climb 6.7 per cent to £2.64m for 2011 – while shares in the company underperformed the FTSE 350 Insurance Index by 47 percentage points over the same period.