Article date: 23 September 2014
The Financial Conduct Authority (FCA) Remuneration Code applies to Aviva Wrap UK Limited and Aviva Investors UK Funds Limited for Aviva Wrap UK Limited, Aviva Investors UK Funds Limited for the 2013 Performance Year (01/01/2013 – 31/12/2013). These companies are designated as level 3 organisations as defined in the Remuneration Code. This disclosure meets the requirements of the Code.
a) Decision-making process for remuneration policy
Aviva Wrap UK Limited and Aviva Investors UK Funds Limited are governed by Aviva’s Group Remuneration Committee ‘The Committee’ which meets regularly to consider issues relating to the remuneration policy and structures for the Aviva Group including the terms of annual bonus and long-term incentive plans and individual remuneration packages for all employees to which the Remuneration Code applies.
The Committee’s attendees comprise the Non-Executive Directors, Chairman, Chief Executive Officer and HR Director of Aviva Plc. Where appropriate the Chief Risk & Capital Officer, Chief Finance Officer, Chief Audit Officer and Chief Strategy & Development Director will advise The Committee and the Group Reward Director & Executive Reward Director will advise on matters specifically in respect to the firm’s remuneration policy. No individual is involved in decisions relating to their own remuneration.
The Committee approves Remuneration Policy Statements for Aviva Wrap UK Limited and Aviva Investors UK Funds Limited. Their objectives are documented in the Directors’ remuneration report in the Aviva Annual Report which is included on the Investor Relations web site, found here
b) External consultants
During the year the Group Remuneration 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, Group 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 criteria for Code Staff:
- Members of the firm’s board e.g. statutory directors including non-executive directors.
- Any director\employee holding any of the following currently defined FCA Control Functions in respect of the firm (changes to be made as appropriate should FCA change the control function definitions);
- CF1: Director Function;
- CF2: Non-Executive Director;
- CF3: Chief Executive Function;
- CF8: Apportionment and oversight function;
- CF10: Compliance Oversight Function;
- CF10A: CASS Operational Oversight Function;
- CF11: Money Laundering Function;
- CF28: Systems and Controls Function;
- CF29: Significant Management Function.
- Any employees with delegated financial or other authority for the firm equivalent to directors\members of the firm’s board.
The Code Staff population is reviewed at least annually by the Remuneration Committee and Code Staff are notified of their status.
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 achieve alignment with Aviva’s business strategy. Remuneration packages are leveraged, with a suitable percentage of pay ‘at risk’ against the achievement of stretching goals, which is aligned with the Company’s risk profile and employee behaviour. 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 discretionary short term incentive plan where individuals have the opportunity to receive a bonus (which is subject to 3 year deferral in to Group shares) based on business and individual performance against targets. The extent to which each aspect of performance affects the overall payment level depends on the role and responsibilities of the individual. Company and Individual performance is measured against objectives built under Financial, Customer and People headings.
- Long Term Incentive Plan – the LTIP encourages a longer-term management focus on Return on Equity (ROE) 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 13 Code Staff for all or part of the 2013 performance year. Aggregate remuneration expenditure in respect of Code Staff for the 2013 performance year was £7.324m.
Having reviewed the business it was considered that the operations of Aviva Wrap UK Limited should be considered as one business unit.
Aviva Investors UK Funds Limited
There were 12 Code Staff for all or part of the 2013 performance year. Aggregate remuneration expenditure in respect of Code Staff for the 2013 performance year was £6.905m.
Having reviewed the business, it was considered that the operations of Aviva Investors UK Funds Limited should be considered as one business unit.