Aviva boss steps down after shareholder backlash

CEO Andrew Moss's resignation from the insurance giant, after shareholders dressed down management over pay, is effective immediately.

by Michael Northcott
Last Updated: 19 Aug 2013

After shareholders rejected a remuneration package for executives at Aviva’s annual meeting last week, it seems a red-faced Andrew Moss is feeling the heat pretty acutely. Today he has resigned, leaving the reins to chairman designate John McFarlane, who will temporarily take the top job while a permanent replacement can be found. 

Aviva shareholders are angry that the value of the firm’s stock has dropped by a quarter in the last 12 months, and yet Moss’s salary was set to increase from £960,000 to over a £1m – not the most palatable piece of strategy when investors’ pockets are hurting. 

Although the firm’s financial performance over the last year has improved - profits were up 6% to £2.5bn at 8 March 2012 - it was too little, too late for Moss. Shareholders were expecting the company to do better and do not feel he deserved such high reward: not enough growth to quell this particular episode in the ‘shareholder spring’…

The Aviva furore over pay kicked off amid a spate of similar shareholder backlashes in recent weeks, but this is only the fourth time a FTSE 100 company has had its remuneration package actually rejected by shareholders. Other firms suffering the anger of shareholders are pharmaceuticals firm AstraZeneca whose CEO David Brennan was essentially ousted, Trinity Mirror whose boss Sly Bailey has stepped down, and just today shareholder hostility is brewing ahead of bookmaker William Hill’s annual meeting. We wonder if they’re offering odds on the outcome?

But among bankers, who were responsible for the outbreak of this recent round of fat-cat-bashing, no one has yet lost their head. Will that change any time soon? Watch this space...

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Subscribe

Get your essential reading delivered. Subscribe to Management Today