Comment: Aviva board proved deaf to the sound of reality

But it was all so palpably foreseeable that you must question the board’s most basic judgment.

Bluntly, senior management looks to have been purblind and tin-eared. That, or so passively arrogant that they thought they could get away with it on the quiet.

It is the only conclusion to be reached when total executive pay at Aviva has ballooned 90 per cent during Moss and outgoing chairman Colin Sharman’s stewardship since 2007.

During that period, group revenues and profits have fallen 19 and 16 per cent respectively, dividends have slumped more than 20 per cent, and the share price has lost not far off two-thirds of its value, down 35 per cent in the past year alone. More than half of Aviva’s shareholders voted last week to stop Moss’s overall pay, with bonuses, going through the psychologically-sensitive £1 million barrier. When 10 per cent of shareholders also voted against him continuing as chief executive, Moss presumably saw the writing on the wall; he was damaged goods that no insurance policy – or waiving of bonus – could redress.

The £2.2m “golden hello” the group gave former Standard Life UK insurance chief Trevor Matthews when he joined last year also smacked of untimely excess to many shareholders, both institutional and private.

Admittedly, Aviva, like its insurance rivals, has suffered a tough trading environment over the past four years, with the industry boat catching the backwash of both the banking and European sovereign debt crises.

But, arguably, the likes of Legal & General, RSA and Standard Life, for example, have ridden the downturn better than the now chief executive-less Aviva.

In fact, there is an argument that Aviva somewhat resembles Prudential in the sector, as both are groups that investors have fallen particularly out of love with for different reasons.

With Tidjane Thiam’s Pru it was a case of what was seen as money‑ squandering hubris in trying to push through a major rights issue and takeover of AIG’s Asian business.

In contrast with that almost flamboyant fall from grace of its rival, with Aviva it has been more a case of serial but quieter senior management change suggesting a boardroom ship under Moss and Sharman where all was not well, jostling for power was rife, and everybody was not singing from the same embedded‑value hymn sheet.

It was less than three weeks ago that Moss – who will leave with about £1.4m in compensation and contractual entitlement by the way – was trumpeting the latest raft of senior management changes to capitalise on both mature developed markets and high-growth emerging market opportunities.

These changes, he forecast, would mean a leaner, more efficient Aviva that could also “accelerate delivery of our strategy and provide opportunities for profitable growth”.

But as the saying goes, life is what happens to you when you are planning other things. The difference is that Aviva’s top brass – including Scott Wheway, chairman of the remuneration committee – should have heard the investor-anger lorry thundering along well before it turned the corner and caused the carnage.

Let’s export our bank bail-out expertise

WE EXPORTED our privatisation expertise to all parts of the globe after the phenomenon’s 1980s heyday, so the thought occurs that we might pass on our nous on government-sponsored bank rescues to Spain as it launches its state bail-out of Bankia, the country’s third-biggest bank.

Suspend all competition rules to allow Lloyds to take over HBOS, while throwing £45 billion at Royal Bank of Scotland as the tidal waters threatened to rise over the heads of Britain’s banking system. Nationalise Northern Rock and assume control of the mortgage book at a capsizing Bradford & Bingley.

Then spend years defending the taxpayer bail-outs as alternative-reality bankers at said rescued banks refuse to play ball and keep awarding themselves bonuses.

Britain could be a mentor to the Spanish government.