Aviva Plc (AV: Quote, AV.L) said Tuesday its Chief Executive Officer Andrew Moss will leave the company, effective immediately. The move comes less than a week after the British insurer lost a vote on its executive compensation plan. The company is also facing intensified pressure from its shareholders to boost returns following its dismal performance over years.
Since Moss's promotion to the top role in 2007, the insurer has reported declining profits and its stock price has plunged 60 percent, losing almost 12 billion pounds of its market value.
Aviva Chairman Lord Sharman confirmed today that Moss approached him with the decision to step aside to make way for new leadership, which he felt was in the best interests of the company. Moss has offered to assist to ensure a smooth transition.
The Board has asked Chairman Designate John McFarlane to take over the top role in the interim, until a new CEO is appointed. The company intends to make a further announcement to confirm the financial terms of Moss's departure.
McFarlane will retain the executive role until a CEO is found, following which he will revert to the role of non-executive Chairman. His executive appointment is subject to regulatory approval, the company said.
McFarlane said, "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."
Last week, about 54 percent of shareholders voted against the company's compensation plan. They were reportedly upset of the amount the company paid to its new UK chief executive, Trevor Matthews, when he joined. Moss had earlier agreed not to take a rise in his own pay.
About Moss, Lord Sharman said, "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."
The firm plans to conduct an in-depth thorough review of all its businesses and investments. It will also initiate a profit improvement program seeking revenue growth where available.
"However, in the light of the subdued nature of our major markets, there is a need for tighter capital allocation, expense and risk discipline, and leveraging technology to greater advantage," it noted.
Aviva said it will postpone the investor presentation scheduled for May 24 until after the Board's annual strategy meeting in June, but will take place before its interim results.
In London, Aviva shares are currently trading at 312.14 pence, up 9.84 pence or 3.25 percent.
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by RTT Staff Writer
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