banking & banking

Former Prudential top agency manager received S$15.3m sign-on bonus from Aviva, court told


AVIVA dangled S$15.3 million as a sign-on bonus to Prudential Assurance Company Singapore’s then top agency manager Peter Tan Shou Yi in 2016, Prudential said.

And Mr Tan’s company, PTO Management and Consultancy (PTOMC), received S$24 million from Aviva’s subsidiary, Aviva Financial Advisers (AFA), after he quit Prudential. This included the 54-year-old’s sign-on bonus and recruitment bonuses for bringing in new agents, the High Court heard on Friday.

PTOMC is the company through which Mr Tan is providing services to AFA.

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Mr Tan and PTOMC are being sued by Prudential for allegedly soliciting 221 agents and 23 agency leaders under Mr Tan to defect en masse to AFA in mid-2016.

Prudential alleges that Mr Tan breached his contractual and fiduciary duties when he carried out the poaching while still being with the insurer.

The insurer, through lawyers from Rajah & Tann, is seeking up to S$2.5 billion in compensation from the two defendants.

Mr Tan, defended by Senior Counsel Thio Shen Yi, rejected any liability as he said he did not have “any non-solicitation contractual obligation”, is not a fiduciary of Prudential and “did not engage in any alleged acts of solicitation”.

He denied the allegation on Friday under cross-examination by Prudential’s lawyer Murali Pillai that his sign-on bonus of S$15.3 million was for him to bring 250 of his agents from Prudential to AFA. The remuneration was to make up for financial incentives that he had to forgo and 1.5 times of his lost income for leaving Prudential, said the defendant, who is legally trained.

The court heard that originally, Mr Tan was to receive S$16 million in sign-on bonus, but this was reduced to S$13.8 million to exclude business allowances, before the quantum was finalised at S$15.3 million.

Clawback of the full amount would be effected if the agents did not meet 70 per cent of business targets in the first draft of the agreement in May 2016.

This condition was changed to meeting 85 per cent of business targets for two consecutive years in the second draft agreement dated June 27, 2016. However, the second draft also included a provision for no clawback if Mr Tan agreed to be bound by a restraint clause prohibiting him from continuing to participate in the financial services sector.

Prudential’s Mr Pillai argued that the condition was changed because Mr Tan had – by June 27, 2016 – secured over 200 agents to go over to AFA.

Mr Tan disagreed.

When the hearing commenced in July, the court heard that Aviva had prepared a war chest of S$100 million to S$150 million to poach the agents.

Mr Tan has completed his testimony. The trial continues on Sept 24.

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