The former Friends Provident chief executive who joined Aviva in December 2011, is a casualty of the management reshuffle instigated by Mark Wilson, who was appointed chief executive of Aviva last year.
Wilson replaced Andrew Moss who was forced out during the "shareholder spring" after 60% of investors failed to back the remuneration report – in part because of the payment to Matthews.
Matthews was hired on a £2.2m package which included a £45,000 bonus for one month's work and a £470,000 cash payment as compensation for losing unvested shares and his 2011 bonus from his previous employer.
The only performance condition was that he remain with his new employer for three years.
The company said he remained entitled to his "contractual obligations", which implies he will receive the last £800,000 share instalment of the signing-on fee in March 2014.
He will step down from the board just before the May annual meeting and stay on as adviser, the fee for which has not been disclosed.
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