First casualty of "boardroom spring"

scorza

scorza

scorza

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http://www.bbc.co.uk/news/business-17987271

After the sizeable but not complete revolt against Barclays CEO Bob Diamond's remuneration a couple of weeks ago, 60% of Aviva shareholders voted against their CEO's pay package, forcing him to resign.

Insurance firm Aviva has announced that chief executive Andrew Moss will be leaving with immediate effect.

The move comes after the firm suffered the embarrassment of losing a shareholder vote on executive pay at its annual meeting last week.

Mr Moss had already turned down an annual salary increase following concerns among shareholders about pay levels at the insurer.
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Aviva's share price was up 5% this morning. So much for having to pay the moon to attract top people...
 
He'll be employed somewhere else. I imagine executives of multi-national insurance companies wouldn't need to step into a Job Centre looking for work.
 
Once you get that high up you tend to also end up on the board of several other places as well.
As ricochet typed, he won't be looking around for too long.
 
OldCoals said:
My wife just turned down an offer of 6,000,000* per year.

Indian rupees.
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By todays rates that's still £85k, and an Indian rupee buys a lot. I've been to Delhi, Punjab, Gujarat and Maharashtra and had really good, decent western style three course meals, including drinks for 500 rupees (just over £7). Indian style meals are cheaper. It would have cost £30 per person in the UK.
 
Well I suppose it was bound to happen sooner and will be interesting to see if similar happens at other companies. A lot of shareholders a bit annoyed and rightly so that boardroom pay is soaring while their share value and dividends seems on the way down.
 
Lets be honest, this isn't about shareholders suddenly questioning the morality of these remuneration packages.

Their returns are down, plain and simple.
 
Woden said:
But now shareholders are realising they can say "no".
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Shareholders aren't stupid - by consistently fighting the board they'll do more damage to the company they have invested in. The occasional "no" like the one in the article is hardly new. A spin is being put on it by the media because we're currently in a financial mess, and they're there to sell stories.

There is no "boardroom spring".
 
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OldCoals said:
They are saying no because they are making less money, not because of some moral stance on boardroom pay.
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They've certainly not had a great time in the press either - wasn't it Aviva that meant to send an email to one member of staff indicating that we was being made redundant, but accidentally sent it to 1,400 employees by accident! :p
 
OldCoals said:
They are saying no because they are making less money, not because of some moral stance on boardroom pay.
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Exactly, I don't think Shareholders care if salaries are going up as long as their investment is still bringing in better returns and the value of their shares are going up.
 
OldCoals said:
Lets be honest, this isn't about shareholders suddenly questioning the morality of these remuneration packages.

Their returns are down, plain and simple.
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Absolutely true, last 10 years maybe a little more, top exec pay inflation has been very high yet shareholders returns have been poor.

I don't see many who have the ability to actually cause problems for execs and remuneration comittees wanting anything other than a slightly realigned share of the cake.

The same people who are making these moves are themselves typically very well paid (ie fund managers etc), so they are not likely to want to see a massive shakeup of senior pay, the sword is likely to move in their direction next if senior execs are seen to have "been dealt with"
 
Insurance firm Aviva has announced that chief executive Andrew Moss will be leaving with immediate effect.

The move comes after the firm suffered the embarrassment of losing a shareholder vote on executive pay at its annual meeting last week.

Mr Moss had already turned down an annual salary increase following concerns among shareholders about pay levels at the insurer.
Click to expand...

Funny that they were worried about a fairly paltry £45k rise when he is already on a ridiculous annual salary of £960k!
 
Reading scorza's posts regarding pay on this forum you'd think Aviva's shareholders did this for altruistic reasons, they didn't. Quote the opposite, they did it because they think that a tumbling share price since he took over is not good enough. This equates to a vote of no confidence and these have been happening in boardrooms since day one. It's not as big a deal as some are trying to make it out to be.

Aviva are now going to have to spend time attracting someone else, that someone else will be more then likely be employed. That person will not leave a secure job for less pay and less perks and certainly not without compensating any stock/pension options from leaving a company early.
 
It could actually be more expensive for Avivia now that they have to look for a replacement. The CEO wanted an extra 45K a year, any new CEO will be expecting a similar salary and to be covered for associated expenses relating to the move. Most of that 45K may go simply on relocation costs, more would go on signing-up bonuses or share incentives.

This has nothing to do with money, it is merely the shareholders were not happy with the CEOs performance. If a suitable replacement came along I'm sure they would happily pay 10-20% more pay than what even the old CEO was demanding.
 
If this was solely down to money, the shareholders are stupid....

The cost of re-hiring and getting another guy in to do the position isn't going to be cheap, not to mention the fact that they'll have to pay a competitive rate anyway.

What is more interesting is the fact that the CEO didn't choose to just waive his bonus. He could easily have rejected the bonus, or accepted a lower amount if they wanted him to stay but not pay him so much.

kd
 
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