Insurance and pensions giant Aviva had a turbulent AGM today with the investors training their guns at the company’s chairman and group CEO for poor share-price performance.
Although the company’s operating profit rose by a staggering 26% to £2.55 billion in 2010 from £2.02 billion recorded a year earlier, shareholders were particularly critical about the underperformance of its shares.
The shares are currently trading at £4.5 while in 2000, when Aviva merged with Norwich Union, they were trading at £10.37. The sharp decline was attributed to the financial crisis by Chairman Colin Sharman.
“Are we happy with the way the share price is? No, I am not satisfied with the way the share price is and we are working on it very hard”, said Mr. Sharman in his defence when one shareholder held him responsible for the share’s decline saying “Since you have been a chairman our share price has been 50 per cent lower”.
Expressing confidence in the company’s performance Andrew Moss, pensions and life group chief executive said: “After a good 2010 we have ever reason to be optimistic about the year ahead. Aviva was one of the only financial services company in terms of insurers and banks which has not taken a knock in terms of financial credibility”.
Underlining the company’s strong reserves, Mr. Moss added: “We are the only ones of our peers to have neither taken a ratings downgrade or had to raise new capital”.
He also underlined the fact that the company’s share price has outperformed the FTSE on year-on-year basis in 2010. “The share price has also seen encouraging improvement over the course of the year, beating the FTSE 100 by 24 per cent”, he said.