The boss of insurer Aviva has waived his 2012 salary increase as part of a review of its executive pay policy launched in response to pressure from shareholders.

The review will look at whether senior executives' pay is justified by shareholder returns, and will also examine how much Aviva compensates executives who join the firm for benefits they forego in their previous jobs, Aviva said today.

CEO Andrew Moss was to have received a salary increase of 4.8 per cent for 2012, equivalent to £46,000.

"Shareholders have reacted badly to the pay of executive directors which has been linked to operating profit rather than bottom line profit, which includes the impact of the turmoil in Europe," said Barrie Cornes, a London-based analyst at Panmure Gordon and Co with a buy rating on the stock. "While the company argues it cannot control factors below the operating line, it is the bottom line that has impacted the share price."

Shares in Aviva, Britain's second-biggest insurer, lost almost a quarter of their value last year, reflecting its exposure to troubled euro zone economies such as Italy and Spain. That compares with a 5 per cent fall in the FTSE Life Insurance index and a 12 percent decline in the Stoxx 600 European insurance index.

"We take the views of our shareholders very seriously," said Scott Wheway, the chairman of Aviva's remuneration committee.

Agencies