Member Info for Richox

It will be nice to be above the 2009 rights issue price of 37p. The share were then trading above 91p. It's just as well we've had world class managers in charge since then.

The leaders of all FTSE companies, and their highly paid recruitment agencies, repeatedly tell you you've got to pay world class salaries and benefits if you want to attract world class business leaders. But then again, they would wouldn't they.

Whatever the rights or wrongs, this news does not help either BT's image or share price. One day there might be some news that does.

First step is to make shareholder ROI an overiding factor in determining bonus payments. Make MAXIMUM %age bonus for BOD members equal to shareholder ROI - and dependant upon whether that ROI is better than a benchmark from other major insurance companies. No shareholder ROI over a year then no bonus for BOD members in that year - regardless of anything else.

The vast majority of people do their best without any extra "incentive" over and above their pay. The best incentive is a penalty for underperformance, such as being fired. Aviva executives' primary job is to ensure OUR company gives US a good return on our investment. They are failing dismally to do this. It's time to cut their pay and stop their bonuses.

The problem is that BT was never really privatised. The government, through Ofcom, will control communications costs by keeping BT's profits down. It will also force BT to do whatever it wants them to do. It won't allow BT to be taken over or go bankrupt. The smart money knows the game.

That's the nature of performance related pay for executives. Perform well and you get a huge bonus on top of your huge salary but if you perform badly then you get a huge bonus on top of your huge salary. Perform really badly and you get a huge severence payment on top of your huge bonus on top of your huge salary - and maybe get huge consultacy fees before you start all over again with the next company.

In my experience share buy backs benefit directors and hurt shareholders.

@nicknaim,
Nice bit of date cherry picking. Let's look at the bigger picture.
Performance over 10 years - down 25%
Performance over 5 years - down 44%
Performance over 3 years - down 45%
Performance over 2 years - down 40%
Performance over 1 year - down 20%
Performance over 6 months - down 30%
Performance over 3 months - up 20%
Performance over 1 months - down 2%
Performance over 1 week - down 4.5%
I'm still getting about 1% interest from the bank, but havn't had a penny in dividend from Aviva for nearly a year. Also try comparing the performance of Aviva with L&G, Prudential, RSA or Phoenix. Shareholders should be giving the BOD a good kicking, even though you seem to be happy with them.

If you can't think of anything else to short, then short Aviva. This share would be well over £20 if it had kept up with the FTSE over the last 30 years. Five dividend cuts in the last 20 years and now a cut to nothing helps to explain why. CEOs come (promising lots of jam) and go (taking huge amounts of cash with them), but Aviva continues along its going nowehere path.

ThJones may be a bit extreme in his views but he is quite right that BT is in effect controlled by government through the regulator. Does anyone really believe the regulators are independent of government?  HMG sold their retained BT shares at around £11 each about 25 years ago and gave the regulator the job of ensuring BT made minimal profit 1) to pin down the market leader and keep charge rates as low as possible accross the industry, 2) to keep inflation down and 3) to avoid any embarrassment over privatisation. They even got away with imposing a windfall tax on BT when it looked as if they had sold it too cheaply at privatisation. Whatever the colour of successive governments it suits them to keep the squeeze on BT. HMG will always get away with it because noone's going to object to greedy shareholders helping to keep Joe Public's costs down. Regulation should be about ensuring health, safety and standards, and preventing fraud, not about delivering any external agena, but that's the way it is. HMG want BT to survive, so survive it will. CEOs and BODs have come and gone, each thinking they can change the system, but they soon realise they can't and end up playing the game until they move on. The smart money knows what's going on and prices the shares accordingly. Something might change one day but I'm not holding my breath.

This share has fallen further and further behind the ftse for the last 30 years. Why should it change now?

It took Conn 5 years to drive us out of the FTSE100. How much did we pay him to achieve this? It's time Centrica's performance related pay scheme was reviewed.

Just to give a historic perespective for people considering being long term holders: in the late 1980s when the ftse was around 2000 the SP of Aviva (then known as Commercial Union) was around £8. Now, the ftse is just under 6000 and the Aviva SP is around £2.30. A succession of world class (??) senior management teams have been paid world class salaries and world class bonuses to steer the company onward and upward. Their successive annual reports have proclaimed how successful they have been under whatever prevailing climate, whilst promising that their sometimes expansion and sometimes consolidation strategies are going to lead to even better results in the years to come. The dividend has been slashed a few times along the route, but this has always been to protect investor's best long terrm interests.

When your expectations of Aviva's performance come down to earth it's easier to remain calm, even if you do remain perplexed. So yes, let's all remain calm, trust that the people whose remuneration we have voted for will protect our investments, and look forward to the jam tomorrow.

BT BODs have acted as if they were responsible to government rather than shareholders ever since BT was privatised. They pick up their huge salaries and bonuses and do whatever the regulator (HMG in disguise) tells them. It never takes them long to realise they are not in control and, when they come to accept this, they focus on feathering their own nests. Shareholders are of no relevance.

Who'd've thought that 35 years after privatising the company HMG still controls it. No chance of a takeover while that's still the case.

Thins to remember when thinking about investing:

Be fearful when others are greedy. Be greedy when others are fearful.
The four most dangerous words in investing are: 'this time it's different'.
Rule No.1: Never lose money. Rule No.2: Never forget rule No.1
Investing is simple - Buy low, sell high.
The only time it can't go lower is when it hits zero.
The disaster waiting to happen will happen just after you make your investment.
If you can't think of anything else to short then short Aviva.

The dividend is supposedly a sum of money allocated to shareholders based upon performance of the company and not on whatever the share price happens to be at dividend time. If the share price went up dramatically that alone would not justify the BOD proposing a proportianately higher dividend - and you can bet they wouldn't. Similarly the recent significant share price drop does not alone justify the BOD proposing a lower dividend. In any case forget the theory. The focus of consecutive Aviva BODs has historically been upon their salaries and bonuses rather than on shareholder interest. You can bet they will use the SP drop as an opportunity to pay shareholders less. Just wait for the spin accompanying the eventual next dividend - prudent financial management enables payment of a dividend giving a 4 or whatever % yield ( ie a proposed mega dividend cut). Then when better days arrive more spin - successful implementation of innovative financal strategies has enabled an inflation breaking 2.5 or whatever %age dividend increase( ie no more than a marginal increase in the ravaged dividend). As the mega institutional Aviva shareholders are on similar gravy trains and are playing with other people's money they let the BOD get away with it time after time. PIs are the sacrificial lambs.

@Pokerchips

You might not realise it, but the big boys have weighed up and acted upon any information that can be bought way before any PI can get hold of it. It's only the first off the mark or those people who have knowledge that is not readily for sale who can really benefit. So where you are right is that it's a big boy's league. We know using inside information is illegal so of course no company director would ever dream of using it, would they ...........

If the directors did indeed sell their shares for tax reasons then they would have bought them back on 6th April. If they did not buy them back on 6th April then we know what they were up to - whatever they might say.