Insurance

COVID-19: Insurer reduces CEO remuneration, cancels dividend

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According to an official statement, SCOR chairman and CEO Denis Kessler “has proposed to the compensation and nomination committee that his annual variable compensation for the 2019 fiscal year be reduced by 30% compared to the amount mentioned in the 2019 URD published on March 13, 2020”. This means he will be taking a 30% pay cut in his annual variable compensation for the 2019 fiscal year which amounted to EUR325,260 ($354,333).

This decision is in line with French financial regulator Autorité de Contrôle Prudentiel et de Résolution (ACPR) calling upon insurers to “exercise restraint on variable compensation award policies” in view of economic uncertainties brought about by COVID-19.

SCOR’s board of directors has also decided to propose to its upcoming shareholders’ meeting that no dividend be distributed for the 2019 fiscal year and that the entire income for that year be allocated to distributable earnings.

The proposal comes after the European Insurance and Occupational Pensions Authority and the ACPR issued statements last month regarding dividend distributions in respect of the 2019 fiscal year.

In its press release dated 3 April, the ACPR said that “insurance companies must […] refrain from proposing the distribution of dividends”.

These statements by the supervisory authorities, which are broad in scope, are said to be dictated by heightened prudence during the unprecedented coronavirus crisis.

The ACPR’s position calling for no dividend distribution covers the period from April until 1 October which means SCOR will regain its freedom in terms of capital management after this deadline.

At its meeting on 26 February, SCOR’s board of directors had originally decided to propose to the shareholders’ meeting that a gross dividend of EUR1.8 per share be distributed for the 2019 fiscal year, in line with its shareholder remuneration policy.

The annual shareholders’ meeting was scheduled to be held on 17 April but has now been postponed to 16 June owing to the difficulties of holding a meeting during the COVID-19 pandemic.

Asia Insurance Review

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