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Aviva cuts director pay under shareholder pressure

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(Globalpost/GlobalPost)

LONDON (Reuters) - British insurer Aviva <AV.L> cut its directors' wage bill by more than a third last year as it tried to mend relations with shareholders who criticised it for excessive executive pay.

Britain's fourth-biggest insurer by market value paid its directors a total of 4.77 million pounds in 2012, down from 7.28 million pounds the previous year, figures published on Monday in its annual report showed.

In May last year, Aviva became a high-profile target of the "shareholder spring", a Europe-wide investor revolt against bumper executive pay, when half of its shareholders voted against its pay proposals for 2011.

Chief executive Andrew Moss was forced out less than a week later as criticism mounted over a poor share price performance during his tenure.

The drop in earnings for Aviva's top managers in 2012 largely reflects the cancellation of all director bonuses. Chairman John MacFarlane, who took day-to-day control of the insurer following Moss's departure, received no extra pay despite his increased workload.

"Whilst we have traditionally had good shareholder support for our remuneration policies over many years, we believe in 2011 we clearly got it wrong," remuneration committee chairman Scott Wheway wrote in the report.

"As a result, the Committee has worked over the last year to make changes that will give us a better framework for the decisions we take."

Aviva, which in July began cutting costs and selling underperforming businesses in an effort to boost profits, said earlier this month that directors would get no pay rises in 2013.

Mark Wilson, the former head of Asian insurer AIA <1299.HK>, who took over as Aviva chief executive in January, is entitled to up to 200,000 pounds to cover the cost of relocating to London from Hong Kong, Aviva said.

(Reporting by Myles Neligan; Editing by Tom Pfeiffer)

http://www.globalpost.com/dispatch/news/thomson-reuters/130325/aviva-cuts-director-pay-under-shareholder-pressure