March 11 2014 Latest news:
Tuesday, May 8, 2012
Aviva chief executive Andrew Moss has stepped down following the major shareholder revolt over executive pay.
Mr Moss will be leaving the group and will cease to be chief executive with immediate effect, the company said in a statement this morning.
The board has asked chairman designate John McFarlane to become interim executive deputy chairman with immediate effect and executive chairman from July 1, pending the appointment of a new chief executive officer. The board has asked him to maintain this executive role while internal and external candidates are assessed to find the very best candidate for the role.
It is envisaged that this process will take a number of months, at the conclusion of which he will revert to the role of non-executive chairman.
Lord Sharman, chairman of Aviva, confirmed that Mr Moss had approached him with the decision that he felt it was in the best interests of the company that he step aside to make way for new leadership.
He has offered to assist in any way he can to ensure a smooth transition.
Lord Sharman said: “We should acknowledge the progress that has been achieved under Andrew Moss’s leadership.
“Through the global financial crisis he led the consolidation of our international presence and the integration of 40 brands into the very powerful single Aviva brand. He reduced the cost base, improved operational performance and more recently began the implementation of the strategic focus, with the sale of RAC, the deconsolidation of Delta Lloyd and a number of overseas disposals.”
He added that the board appreciates the contribution Mr Moss has made both in his role as chief executive, and prior to that as group finance director, and wishes him well with the next phase of his career.
Last week more than half of the shareholder votes at Aviva’s annual meeting failed to back the insurer’s pay awards.
The defeat came despite Mr Moss waiving a near-5pc pay rise which would have taken his annual salary over the £1m mark.
Some 50pc of votes placed outside the AGM went against the pay report, while an additional 9pc were withheld, in one of the biggest ever shareholder protest votes.
In regard to Mr McFarlane’s additional responsibilities, Lord Sharman said: “Aviva’s shareholders are in very good hands. His leadership and shareholder credentials are impeccable having transformed ANZ during his tenure as CEO, as well as making a significant contribution to the improvement in shareholder value at Standard Chartered prior to that.”
Mr McFarlane said: “Aviva is a leading company in the insurance sector and I’m excited to play a pivotal role in its transformation and future. I feel I can make a real difference. My first priorities are to regain the respect of our shareholders by eliminating the discount in our share price and to find internally or externally the very best leader to be our future CEO. I will meet all of the major investors over the coming days and weeks.”
Mr McFarlane will immediately assume the task of improving the delivery of shareholder value by the group, a challenge he acknowledged is significant.
To this end he has announced a new set of priorities for Aviva:
Focus: An in-depth thorough review of all Aviva’s businesses and investments to ensure the company is focused on attractive segments, that have a meaningful market position, where it can generate superior returns over the cycle, and where it is confident of success.
Financial Strength: Build the capital and financial resources of the group to ensure it achieves and maintains financial strength. In addition it will implement a more dynamic reallocation of the group’s capital resources to improve return and reduce risk.
Performance: Creating value through a profit improvement programme seeking revenue growth where available. However, in the light of the subdued nature of major markets, there is a need for tighter capital allocation, expense and risk discipline, and leveraging technology to greater advantage.
Stakeholders: Improving the service to customers, advancing and developing talent and leadership in people, building the trust in which Aviva is held by shareholders, business partners, regulators and the communities where it operates.
The investor presentation scheduled for May 24 will be postponed until after the board’s annual strategy meeting in June but will take place before the group’s interim results.
Mr McFarlane said: “We fully recognise the challenges in some of our markets and businesses but I do believe Aviva has a great future. We have a strong brand, dedicated people, a solid business foundation and we are well-positioned for the journey ahead.”
Mr McFarlane’s executive appointment is subject to regulatory approval.