Lloyds defends pay for top bosses
Updated on 06 May 2010
Taxpayer-backed Lloyds Banking Group has sought to defend its pay policies for top bosses amid calls for shareholders to vote down its remuneration plans.
Chief executive Eric Daniels waived his bonus for 2009, but the bank's remuneration committee has been criticised for making the award after Lloyds slumped into the red last year by a mammoth £6.3 billion.
The decision has also been widely blamed for the unexpected announcement in March that the chairman of the remuneration committee, Wolfgang Berndt, was to retire at Thursday's shareholder meeting.
Chairman Sir Win Bischoff told investors at the bank's annual general meeting in Edinburgh that the group had to "strike a balance" in making pay decisions for key executives.
He said: "The board, on the recommendation of the remuneration committee, believed that he (Eric Daniels) merited a bonus because of his significant personal contribution and the group's overall performance, albeit loss-making in 2009."
In relation to wider incentive payments across the group, he said it was "right they receive appropriate financial recognition when stretching financial targets are met".
His comments come in the face of stiff opposition from shareholder group Pirc, which has advised institutional investors to reject the Lloyds pay proposals it believes are potentially "excessive".
There has likewise been concern over performance measures in the long-term incentive awards and the inclusion of a share price target, especially given recent share gains for Lloyds stock that have taken shares close to the trigger level at which rewards start to kick in.
But UK Financial Investments (UKFI) - the body charged with managing Government-owned banking assets - confirmed its support for Lloyds, which is 41% owned by the state.
UKFI said: "Lloyds has made very significant reforms to remuneration practices at the bank over the last year, including the introduction of stringent deferral and clawback terms for bonuses."
These news feeds are provided by an independent third party and Channel 4 is not responsible or liable to you for the same.
