Aviva, the insurance company, has announced plans for a goodwill payment for shareholders totalling up to £14m following its controversial announcement to cancel preference shares.
The payment will go to shareholders who sold their preference shares after the company’s announcement in early March.
After a storm of protest, Aviva reversed its decision later in the month.
A statement to the London Stock Exchange yesterday said: “Aviva recognises the uncertainty created for preference shareholders whilst Aviva was considering its options and the impact it had on the wider reputation and trust in the company.”
The company believes that fewer than 2,000 shareholders are affected. KPMG will handle the payments.
Mark Wilson, group chief executive, said: “Our announcement on 23 March meant that Aviva’s preference shareholders could rest secure in their holdings. However, we recognise that whilst we were considering our options for the preference shares this caused uncertainty and led some investors to sell their shares.
“The board and I want to do the right thing and make this goodwill payment.”
The preference shares will no longer count as regulatory capital from 2026. Aviva said it will work towards either gaining approval for the shares, or finding a “suitable substitute”, to qualify as capital from 2026.
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