FSA Remuneration Code Disclosure

Article date: 25 July 2013

The FSA1 Remuneration Code applies to Aviva Wrap UK Limited and Aviva Investors UK Funds Limited for the 2012 Performance Year (01/01/2012 – 31/12/2012). These companies are designated as level 3 organisations as defined in the FSA Remuneration Code. This disclosure meets the requirements of the Code. 

a) Decision-making process for remuneration policy

FSA’s Remuneration Policy Statements for Aviva Wrap UK Limited and Aviva Investors UK Funds Limited have been approved by Aviva’s Group Remuneration Committee, ‘The Committee’. The Committee’s objectives and membership are documented in the Directors’ remuneration report in the Aviva Annual Report which is included on Investor Relations website.

b) External consultants

FIT Remuneration consultants acted as independent advisors to the Committee until May 2012 (having been appointed as advisors to the Committee in August 2011). FIT is a member of the Remuneration Consultants Group and adheres to its Code of Conduct. It provided no other services to the Company during the year.  

During the year the Committee received advice on executive remuneration matters from Deloitte LLP which is a member of the Remuneration Consultants Group and adheres to its Code of Conduct. Deloitte LLP was appointed as advisor to the Committee on 4 December 2012. In addition during the year, management received advice on remuneration matters and taxation from Deloitte LLP and on remuneration matters from Linklaters LLP.

c) Role of the relevant stakeholders

The Remuneration Committee takes full account of the company’s strategic objectives in setting remuneration policy and is mindful of its duties to shareholders and other stakeholders. The Committee seeks to preserve shareholder value by ensuring the successful retention, recruitment and motivation of employees.

d) Code Staff criteria

The following groups of employees have been identified as meeting FSA criteria for Code Staff:

1) Directors of UK regulated entities

2) Selected roles which have a significant influence on the firms risk profile, which includes individuals registered with the FSA.

The Code Staff population is reviewed at least annually by the Remuneration Committee.

e) The link between pay and performance for Code Staff

Both Companies’ remuneration framework is based on a total reward approach and is designed to reflect the success or failure against a range of targets.  These targets are defined within a business balanced scorecard (which includes suitably risk adjusted factors) covering financial, employee, customer and personal performance. There are four components of pay:

  • Basic Salary – set within an appropriate market range, which is sufficient to allow the possibility, where performance so warrants, that an employee may receive no variable pay.
  • Annual bonus – a short term incentive plan where individuals have the opportunity to receive a bonus (which is subject to deferral) based on business and individual performance against targets. There are no deferrals on bonus for employees at ‘Head of’ level.
  • Long Term Incentive Plan – the LTIP encourages a longer-term management focus on Return on Capital Employed (ROCE) and relative Total Shareholder Return (TSR). These metrics measure how the Company is performing in both absolute and relative terms.
  • Benefits in Kind – standard benefits are provided that are appropriate to the market.

Additionally, the Company may decide that a Deferred Share Award which has not Vested (or, in the case of Options, been exercised) will lapse wholly or in part if they consider that:

  • the Participant or his/her team has, in the opinion of the Directors, engaged in misconduct which ought to result in the complete or partial lapse of his/her Award; and/or
  • there was a materially adverse misstatement of the Company’s financial statements.

f) Aggregate remuneration cost for Code Staff

Aviva Wrap UK Limited

There were 18 Code Staff categorised as Senior Management and 1 other Code Staff, for all or part of the 2012 performance year. Aggregate remuneration expenditure in respect of Code Staff for the 2012 performance year was £9.93m. 

The table sets out the total aggregate remuneration for the Code Staff population.  Having reviewed the business it was considered that the operations of Aviva Wrap UK Limited should be considered as one business unit.

Number of Code Staff

19

Total Remuneration

 £9.93million

Aviva Investors UK Funds Limited

There were 16 Code Staff categorised as Senior Management and 1 other Code Staff. Aggregate remuneration expenditure in respect of Code Staff for the 2012 performance year was £6.15m. 

The table sets out the total aggregate remuneration for the Code Staff population.  Having reviewed the business, it was considered that the operations of Aviva Investors UK Funds Limited should be considered as one business unit.

Number of Code Staff

17

Total Remuneration

 £6.15million


1From 1st April 2013 the FSA has been superseded by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA), however for 2012 FSA was the regulator.

 

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