Belfast Telegraph

Friday 18 April 2014

New broom still has to appease angry Aviva shareholders

The new boss of insurance giant Aviva has failed to quell shareholders' anger as he faced them for the first time since their rebellion forced out his predecessor.

Mark Wilson sought to assuage investors at the company's AGM by admitting it had under performed, telling them he agreed with objections over executive pay, and insisting its new board was turning the business around.

Meanwhile, chairman John McFarlane acknowledged past failings but said of current arrangements over pay: "I don't think we do have our hands in the trough."

But many shareholders remained angry about "payment for failure on a grand scale" as well as questioning a decision to slash dividends.

Around one in eight votes failed to back the board's remuneration report for this year.

Speakers at the AGM were applauded as they criticised pay-offs for departing executives, demanded the chairman of the remuneration committee resign and called for another board member to give his bonus to charity.

Mr Wilson was appointed chief executive after the departure of Andrew Moss following last year's humiliation when the bulk of investors voted down a controversial pay deal.

Aviva is now undergoing a major restructuring amid a boardroom clear-out and disposals which saw it record a headline loss of £3bn this year.

Mr Wilson, who joined the company in January, acknowledged that shareholders had last year sent the board a "very clear message" about their anger over its performance and uncertainty over its direction – and that there was still a "sense of frustration and impatience".

He said there was a "great deal of work ahead" to turn around the company's fortunes.

In March, Aviva stunned investors by slashing the firm's full-year dividend payment by 44% to 9p a share as part of a strategy to rebuild its capital strength. It has also announced 2,000 job cuts across the business.