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Influential proxy advisors have direct line investors in order to vote for bonus awards worth 300% of their base salary, putting them under updated scrutiny of insurance companies’ pay practices ahead of the expected acquisition by Aviva.
Institutional Shareholder Services said investors should reject the long-term incentive planning award. This could pass Chief Executive Adam Winslow about £2.55 million and Chief Financial Officer Jane Pool £171 million. Executives must meet performance criteria to receive the full prize.
The bonus is the largest level allowed under our compensation policy – was first proposed last summer after the direct line dodged the purchase income bill from Belgian insurance company AGEAS.
However, before direct line agreed to sell to Aviva, the board’s pay package was decided. This is a transaction awaits regulatory approval. The acquisition is expected to be completed by the year, the company said.
In its annual report last month, the Direct Line board said the bonuses will be granted as planned, adding that the incentive package “must work effectively in all scenarios.”
Shareholders will vote for the bonus at the company’s annual general meeting on May 14th.
The ISS questioned whether wage packages remain relevant following the success of Aviva’s purchase bids, noting that consultations with award investors were cut short by the Aviva approach. The ISS also states that the previous bonus awards for 2021 were confiscated due to poor performance.
Direct Line says that one of the bonus’s objectives is talent retention. Winslow, who joined Aviva’s group, leads the UK and Ireland general insurance troops and is widely expected to resign after the transaction is completed, people familiar with the matter said.
The £3.7 billion acquisition of Aviva’s direct line has been one of the UK’s insurance sector’s most important integrated contracts in recent years, as the industry responds to cost pressures and regulatory scrutiny.
The all-cash offer agreed after months of speculation in December 2024 is expected to give Aviva more than the fifth in the UK auto insurance market.
Last week, AGEAS announced a £1.3 billion deal to buy rival Esure from private equity group Bain Capital.
