NU chief's record pay packet

Richard Harvey, chief executive of Norwich Union owner Aviva, will leave for a year of charity work in Africa with the help of a record £2.6m pay packet.

Richard Harvey, chief executive of Norwich Union owner Aviva, will leave for a year of charity work in Africa with the help of a record £2.6m pay packet.

The 56-year-old stands down in the summer after 10 years at the helm of the insurance giant and plans to spend time living in a remote African village with his wife Kay.

The pair want to follow in the steps of their daughter Jenny who spent nine months in a primitive village in Uganda before taking up her place at university.

Figures published yesterday (thurs) reveal Mr Harvey is leaving on a high note - with his final full-year pay packet his biggest yet.

Mr Harvey's total remuneration for 2006 was £2.6m, up from £1.9m in 2005, enough money to pay the salaries of 433 teachers in Africa.

The figure includes a basic salary of £875,000 up from £790,000 a year earlier. He also received a bonus of £1.296m, up from £1.028m. This is paid in a mixture of cash and shares.

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His benefits package, which includes private medical cover, reduced to £61,000 from £104,000.

But the overall figure was boosted by £450,000 paid into a new long term savings plan called the Aviva Capital Accumulation Plan (ACAP). This money is held in trust for five years.

Aviva spokesman Hayley Stimpson said: “Directors pay is linked to the performance of the company. Aviva produced its best ever performance this year and pay and bonuses are linked to that.

“The pay of directors and staff is also benchmarked against industry standards and the better the company does the more staff and directors receive.

“In addition much of the director's remuneration is in shares rather than cash.”

When he leaves in the summer, Mr Harvey will also be entitled to a generous pension.

Under the terms of his contract he will receive at least £75,000 a year from Aviva once he reaches the age of 60. He can cash this in earlier, although this would reduce the pay-out.

His main pension will be topped up with an additional £9,000 a year from his time as boss of the company's New Zealand business.

He also owns thousands of Aviva shares given to him under a number of different schemes.

Mr Harvey's fellow directors also received large pay packets for 2006.

Finance director Andrew Moss, who takes over as chief executive in July, saw his total remuneration rise to £1.5m from £1m a year earlier.

Patrick Snowball, executive chairman of Norwich Union, saw his pay increase, but by a much smaller amount. His package grew to £1.34m from £1.3m and Aviva executive director Philip Scott saw his package grow to £1.28m from £1.1m.

Earlier this Aviva announced record profits of £3.25bn, up 12pc on the previous year. The company was boosted by a strong performance from the UK with sales and profits up and both Norwich Union Life and general insurance division Norwich Union Insurance.

Aviva's profits were also boosted by its cost saving programme which is designed to save the company £250m a year by 2008 and includes axing 850 jobs in Norwich by the end of this year.