Aviva sends Mark Wilson on gardening leave with £6.5m package
London Briefing: Shares in FTSE 100 group promptly gain 2%
Departing Aviva chief executive Mark Wilson. Goodness knows how much they’d pay him if he were the right man for the job. Photograph: Reuters
Fancy six months off on gardening leave – and a pay and bonus package worth up to £6.5 million (€7.4 million) to go with it?
That’s the reward insurance giant Aviva is shelling out to its chief executive, Mark Wilson, after deciding that he’s not the right man for the job. Goodness knows how much they’d pay him if he were the right man for the job.
Wilson’s immediate departure as chief executive was announced on Tuesday, with Wilson understood to have been informed of the board’s decision on Monday. Shares in the FTSE 100 group promptly gained 2 per cent as the City clearly reckoned it would not fare too badly without him.
“We have agreed with Mark this is the right time for a new leader to ensure Aviva delivers to its full potential,” said chairman Adrian Montague, who will step into the breach while a replacement is recruited.
Wilson is leaving Aviva in a “far stronger state than when he joined,” Montague said. For his part, the New Zealander said he’d achieved what he wanted and “it’s time for me to move on to new things.”
So far, so amicable . . . or perhaps not. The fact that no successor is in place, and that Wilson has already departed to tend his garden, would seem to suggest deeper disagreements between board and chief executive, despite their warm words.
New Zealander Wilson (52), has headed Aviva for six years but has failed to deliver the growth investors expected, leaving its share lagging rival insurers
New Zealander Wilson (52), has headed Aviva for six years but has failed to deliver the growth investors expected, leaving its share lagging rival insurers.
And he has proved himself to be somewhat accident prone in recent months – earlier this year he enraged the City by attempting to push through a plan to redeem £450 million of high-yielding “irredeemable” preference shares at less than their market value.
After an outcry from investors, Aviva was forced to abandon the move, which has also triggered an investigation by the City regulator.
Another source of investor unrest was Wilson’s decision to take a board seat at BlackRock, the American fund management group. Aviva has its own fund management arm and many investors felt the extra-curricular role was in conflict with Wilson’s day job, not to mention the time commitment it would entail.
Wilson will at least have plenty of time for BlackRock in the future – when he has finished tending his garden.
Royal Bank of Scotland
What springs to mind when you think of Royal Bank of Scotland?
Is it Fred “the Shred” Goodwin, the bank’s reviled former chief executive, ousted 10 years ago and today still enjoying a pension pot worth £17 million?
Perhaps it’s the £45 billion that taxpayers were forced to pour into the group at the height of the financial crisis? Or maybe it’s the record-breaking losses of £24 billion racked up by the bank in 2008.
Chairman Sir Howard Davies is keen to draw a line under the past, but recent milestones on the road to recovery – the first profit in 10 years, a return to dividend payments – have proved less memorable that the tumultuous events of the past decade.
A survey over the summer showed that fewer than half of Royal Bank of Scotland’s customers would recommend it to friends or family, putting it in joint last place with Clydesdale for personal banking. RBS was also bottom of the business banking league.
Sir Howard insists the culture that got RBS, owner of Ulster Bank, into such trouble during the financial crisis has changed for good, but it is clearly taking longer than he’d like to shift public perceptions.
Tarnished corporate name
No surprise, then, that the RBS board is considering ditching the group’s tarnished corporate name in an effort to shake off its past disgrace. No decision has been made, as the bank wants to avoid being ridiculed for the move, but the name is definitely “under review,” Sir Howard says.
Would the bank be more palatable to consumers – and investors – with another name? Or would they see straight through that?
A name change – to Natwest, for example – would certainly underline the bank’s determination to start afresh and, given time, (and good behaviour) might well work.
Fiona Walsh is business editor of theguardian.com