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Five of the leading bosses in UKGI took home more than £11m in total remuneration for 2019

The decline in the pay taken home by insurer chief executives halted in 2019 after falling by almost a third in the previous year.

The chief executives at five of the leading insurers in UKGI took home total remuneration worth £11m in 2019, after profits soared by 30% to more than £5bn.

This was broadly in line with levels for the previous year, although there have been changes in who fills those top positions.

RSA’s Stephen Hester continued his reign as the highest paid insurer chief executive, netting himself a total of £4.1m over the course of 2019, down just 0.2% on his total remuneration for 2018.

Had it not been for a near halving of his long term incentive plan (LTIP) award to £1.1m, however, Hester’s total remuneration would have been much higher.

Hester’s base pay increased by 2.0% over the year, just below RSA’s average employee increase of 2.3%, while his annual bonus nearly tripled to £1.5m after the insurer reported a 2% increase in profit before tax to £492m for 2019 (2018: £480m).

The insurer exceeded all of its financial targets for the year, meaning that Hester took home an additional 38% of his base salary out of a maximum of 40%, while he also received a bonus equivalent to 25% of his base pay out of a possible 30% for exceeding business-related targets.

Moreover, Hester took home a maximum bonus of 30% of his base pay as a result of his performance against individual targets relating to business strategy, people issues and business performance.

Million pound bonus

New Direct Line Group (DLG) chief executive Penny James, who started in the role at the beginning of May 2019, was the only other boss to take home a bonus north of £1m after she was awarded 76% of the maximum bonus she could take home for 2019 for the insurer exceeding targets for both financial performance and customer service.

The insurer had set itself a financial target of achieving a profit before tax of £499m; DLG reported a final figure for 2019 of £509.7m.

James did not, however, receive any award as part of the insurer’s LTIP programme, and took home total remuneration of £1.9m for 2019 after receiving basic pay of £755,000 in addition to pension and other benefits, as well as the annual bonus detailed earlier.

Admiral’s David Stevens, meanwhile, was the lowest earner of the five insurers, taking home basic pay of £409,283 for the year, up 2.5% on the £399,301 he took home in 2018.

Due to his large shareholding in the company, Stevens is not eligible for the insurer’s annual bonus programme, nor an LTIP award.

Hastings’s Toby van der Meer, meanwhile, was the chief executive who received the biggest uptick in basic pay after receiving a 24.7% pay rise compared to 2018, despite a 42% decrease in profit before tax to £110m.

Van der Meer also received a £102,000 annual bonus and just over £1m as part of the insurer’s LTIP, despite Hastings’s ongoing struggles.

Van der Meer’s bonus was based solely on his performance against the business’s corporate and individual objectives after the company fell short of its financial target of achieving a profit before tax of £177m, and even failed to manage the £150m required for the minimum payout under the financial element of the bonus programme.

Hastings’ corporate and individual objectives are based around the 4Cs - colleagues, customers, company and community - and it is performance against these measures that netted van der Meer his £102,000 bonus.

The Hastings chief executive also took home more than £1m as part of the company’s LTIP programme, the second-highest of five bosses in this analysis, taking his total remuneration, including pension and benefits, to £1.7m

Aviva exec success

The second-highest overall earner, however, was Aviva’s Maurice Tulloch, who started in his new role on 1 March 2019, and took home total remuneration worth more than £3m for 2019, more than £1m ahead of third-placed James.

Tulloch took home an annual bonus of £886,000 despite the insurer failing to meet two of its three financial targets. It did, however, exceed its operating capital generation (OCG) target of £1.7m after reporting a figure of £2.3m for the year.

The insurer also failed to hit its two strategic targets, but Tulloch was praised for his “strong leadership”, as well as the “establishment of the strategic direction for the group to simplify the business” and the launching of a new project to “reduce costs by £300m net by 2022, with £72m reduction achieved in 2019”.

Tulloch’s individual performance netted him an additional 5% of his bonus, meaning he received nearly half (49.7%) of the total bonus he was eligible for under Aviva’s bonus scheme.

He also received nearly £600,000 under Aviva’s LTIP programme, taking his total remuneration for the year above £3m.