FSA Remuneration Code Disclosure

The FSA Remuneration Code applies to Aviva Wrap UK Limited, Aviva Investors UK Fund Services Limited and Aviva Investors UK Funds Limited. These companies are designated as tier 4 organisations as defined in the FSA Remuneration Code. This disclosure meets the requirements of the Code.

a) Decision-making process for remuneration policy

FSA’s Remuneration Policy Statements for Aviva Wrap UK Limited, Aviva Investors UK Fund Services and Aviva Investors UK Funds Limited have been approved by Aviva’s Group Remuneration Committee, "The Committee". The Committee’s objectives and membership are documented in the Directors’ remuneration report in the Aviva Annual Report which is included on the Investor Relations website.

b) External consultants

The committee received independent advice on executive remuneration issues from Hewitt New Bridge Street up to August 2011 and thereafter from FIT Remuneration Consultants LLP. Other consultants are used from time to time to advise on specific issues.

During the year, the group chief executive provided regular briefings to the committee and the committee received advice from the group human resources director, the group reward & HR policy director, the chief accounting officer and the chief risk officer, who provided advice to the committee on the implications of the remuneration policy on risk and risk management. No individual is involved in decisions relating to his or her own remuneration.

c) Role of the relevant stakeholders

The remuneration committee takes full account of the company’s strategic objectives in setting remuneration policy and is mindful of its duties to shareholders and other stakeholders. The committee seeks to preserve shareholder value by ensuring the successful retention, recruitment and motivation of employees.

d) Code Staff criteria

The following groups of employees have been identified as meeting FSA criteria for Code Staff:

1. Directors of UK regulated entities
2. Selected roles which have a significant influence on the firms risk profile, which includes individuals registered with the FSA.

The Code Staff population is reviewed at least annually by the remuneration committee.

e) The link between pay and performance for Code Staff

Both Companies’ remuneration framework is based on a total reward approach and is designed to reflect the success or failure against a range of targets. These targets are defined within a business balanced scorecard (which includes suitably risk adjusted factors) covering financial, employee, customer and personal performance. There are three components of pay:

• Basic salary – set within an appropriate market range, which is sufficient to allow the possibility, where performance so warrants, that an employee may receive no variable pay.
• Annual bonus – a short term incentive plan where individuals have the opportunity to receive a bonus (which is subject to up to 50% deferral) based on business and individual performance against targets.
• Long Term Incentive Plan – the LTIP encourages a longer-term management focus on Return on Capital Employed (ROCE) and relative Total Shareholder Return (TSR). These metrics measure how the Company is performing in both absolute and relative terms.
• Benefits in kind – standard benefits are provided that are appropriate to the market.

Additionally, the Company may decide that a Deferred Share Award which has not Vested (or, in the case of Options, been exercised) will lapse wholly or in part if they consider that:

• The participant or his team has, in the opinion of the directors, engaged in misconduct which ought to result in the complete or partial lapse of his award; and/or
• There was a materially adverse misstatement of the Company’s financial statements.

f) Aggregate remuneration cost for Code Staff by business area

Aviva Wrap UK Limited

There were eight Code Staff categorised as senior management and two other Code Staff. Aggregate remuneration expenditure in respect of Code Staff for the 2010 performance year was £5.6 million.  

The table sets out the total aggregate remuneration for the Code Staff population, broken down by senior management and other Code Staff. Having reviewed the business it was considered that the operations of Aviva Wrap UK Limited should be considered as one business unit.

	Senior management	Other Code Staff
Number of Code Staff	8	2
Total remuneration	£5.3 million	£300,000

Aviva Investors UK Fund Services Limited and Aviva Investors UK Funds Limited

There were five Code Staff categorised as senior management and four other Code Staff. Aggregate remuneration expenditure in respect of Code Staff for the 2010 performance year was £4.3 million.  

The table sets out the total aggregate remuneration for the Code Staff population, broken down by senior management and other Code Staff. Having reviewed the business it was considered that the operations of Aviva Investors UK Fund Services Limited and Aviva Investors UK Funds Limited should be considered as individual business units.

	Senior management	Other Code Staff
Number of Code Staff	5	4
Total remuneration	£3.3 million	£1 million

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