If the value of what a company sells or invests in drops then the SP usually falls...it is not rocket science..
Bonds with frighteningly low yields, property funds where people fear a crash in commercial property values, fixed income assets with historically low returns, are all not exactly flavour of the month with investment buyers.
If the FTSE drops back to 6200 or less then that may well be because the pound rises and the likes of the miners,oil,rolls royce, Glaxo etc give up some of their sterling gains to profit takers...
Theresa May winning and setting an agenda with Europe and prioritising a few things should stabilise confidence and get a grip on the rudder.
A FTSE drop to 6000 or 5900 seems unlikely, in my opinion, given the decent US jobs figures...unless there is some "horrendous" data from China or a major terrorist event.
It seems any fear of recession is counter balanced by a hope of QE ...the idea that there is some kind of "safety net " anyway...
How Mark Wilson and his team decide the way the dominoes will fall is no easy prediction but I would take a guess that he is being cautious on all fronts.
Management pay well that will change,the share price worth less than it was 3 years ago ,Aviva was on the decline long before BREXIT,the FT standing at 6625 where do you think aviva will be if the market tanks to 6000 or below ?3-60 something going nowwhere !!!
Fundamentally sound company with good, if not well paid, management. Aviva more than some seems prone to market swings . Very early days in the Brexit saga so will be some months before they will know how Brexit is effecting the books.
Thanks for your detailed and measured response Pokerchips. I've been in Aviva since way back in its Commercial Union days. Although it's probably been the most frustrating share in my portfolio, always seeming to show promise but somehow never fulfilling it, I doubt that I will ever sell though. You are right that whatever you think of the system it works the way it does for a reason. I'm not going to change it, but when you feel something is just not right it makes you feel better to wave a flag.
Any way. good luck to all of us, both with Aviva and Brexit.
Richox, I understand your views and to a certain extent make perfect sense.
Since Brexit, whilst Aviva have not given a financial update they have issued an RNS stating that they have spent a considerable amount of time on preparing for BREXIT or REMAIN and as yet neither you nor anyone else has any idea how the company has performed as a result of BREXIT.
AVIVA invests a lot in its funds so it at risk with the market....everyone knows that or should...
You have no idea what decisions he and his advisors have taken. Considering how close the vote was destined to be it is hardly suprising if some of those decisions turn out to be good or bad.
Given the current economic environment around the world and with low bond yields, interest rates and lacklustre growth it is expecting a great deal to presume that any CEO of an insurance or banking unit can achieve high growth and profit figues. To do so often means taking RISKS ..shareholders want success but dont want any risks that fail....yeah right !!! Things change from day to day....
Shareholders HAVE to take some responsibility in judging the market conditions.
You cannot just buy a share and sit on it and throw peanuts at the CEO if the SP declines...the market behaves against perfecting good performing CEO's...
Shareholders have merely paid a price for a share which they have bought from someone else with the view that they think they can sell it on to someone else at a higher value. The BOD gives guidelines and works to try and achieve that but there is no guarantee that may happen despite the CEO's very best abilities.
At times shareholders misjudge what the share price is worth overpaying for it and then blaming the CEO.
At the beginning of the year people were prepared to pay 500p+ for a share of AVIVA but it seemed a lot to me and I was suprised with that...others werent and continued to buy
Pay scales are indeed a difficult subject and bonuses very debatable indeed so...It all boils down to demand and supply and paying for what you think is the best in the market.
Same with footballers...ridiculous amounts of pay and pampering..but if you dont pay for Messi then your opponent will...its like poker you have to pay to stay in the game and up with the best...
If AVIVA doesnt keep up then someone will buy up the scraps..
While CEO, Mark Wilson is responsible for whatever happens to Aviva. The results of his actions and decisions influence the SP. He can't influence external matters, but he is in the insurance/risk management business and has vast resources at his disposal. The referendum and the risk of Bexit have been on the cards for some time. Mark Wilson was responsible for managing that risk and protecting shareholder value from it. Don't underestimate small shareholders' understanding. We know his job is not easy, and he rightly deserves a "good" salary, but we shareholders are keeping him in his post to make money for us, not to oversee a loss of value. Determining an appropriate amount to pay him is a complex issue, but comparing his remuneration with that of our Prime Minister for example is indicative that something is wrong. And don't confuse the professional manager that he is with a risk taking entrepreneur.
Offering huge salaries is not a guarantee of getting a steady pair of hands. The financial world does not seem to be betting on Mark Wilson's ability to steer Aviva through Brexit, and I don't think many long term investors have felt much benefit from his 3½ years at the helm.The consensus was that Messers Moss and McFarlane didn't perform too well on their huge salaries and bonuses either. Leapfrogging salaries and ever increasing bonuses don't ensure better decision making, or even necessarily help retention.
Just as an aside, the huge discrepancy in remuneration levels may well have contributed to a Brexit protest vote by those struggling to survive below the "average" salary. Perhaps the possible economic damage is of little relevance to them because they feel hopelessly cut adrift - a peaceful revolution brought about by a perception (reality??) of self serving elites.
Mark Wilson has no influence on the SP post BREXIT and equating him to the SP is somewhat absurd.
Small shareholders appear not to understand how the insurance companies work or the affects of currency fluctuations and market uncertainty has on their invested funds.
When you have 28,000 employees and an operating income of £2.286 billion a payout of £5.7m is tiny for someone who steers a large ship through troubled waters...
I would far rather pay a steady pair of hands £5m ..given that if you dont then someone else will ( a competitor at that) Than pay half that to someone who may "cause" much more potential damage... and if I was running a pension fund I would be thinking the same.
People voting for BREXIT may well turn out to cause far more economic "damage " than Mark Wilson is likely to do in his lifetime.
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