DCSIMG

Antonio Horta-Osorio facing fight over Lloyds bonus

Antonio Horta-Osorio. Picture: Getty

Antonio Horta-Osorio. Picture: Getty

  • by MARTIN FLANAGAN
 

LLOYDS Banking Group’s chief executive yesterday risked an onslaught of public criticism after refusing to rule out taking his annual bonus.

Antonio Horta-Osorio and his chairman, Sir Win Bischoff, told a committee largely made up of MPs that talks over the size of the bonus pool – and any pay-out the chief executive was due – were continuing until the end of this month when the bank reports its annual results.

Horta-Osorio told members of the Parliamentary Commission on Banking Standards: “That is something the [bank’s] remuneration committee and the board are going to consider at the end of this month. There is nothing decided about that and I would not like to speculate.”

Lloyds is under pressure on the issue after two rival banking bosses, Antony Jenkins at Barclays and Stephen Hester at Royal Bank of Scotland, said they will waive incentivisation payments for 2012.

Some reports have suggested Lloyds’s remuneration committee is considering paying the bank’s Portuguese boss a bonus of about £1.5m, about two-thirds of his maximum target-related pay-out of £2.3m.

Bischoff told MPs: “We have not made any determination in relation to that.” The chairman said Lloyds’s remuneration committee “have an idea” at this stage what the bonus pool will be according to profitablity, and it was likely to be amongst the lowest of the main high street banks.

Bischoff said: “We are very conscious of the point you make. As a taxpayer-owned company we should be very aware of public sentiment and we will be.” Horta-Osorio voluntarily gave up his bonus for 2011 because of work-related absence due to stress.

Jenkins waived his bonus of up to £2.75m last Friday, saying it was appropriate given the bank’s torrid year, which included an almost complete clearout of the board following the Libor-rigging scandal. Hester relinquished any bonus because of major computer malfunctions that hit millions of customers last summer.

Horta-Osorio told MPs that he was in favour of “electrified” ring-fencing of the retail and investment banking businesses of Britain’s big clearers to allow them to be forcibly made to split the activities if they were not complying with the spirit of the plan.

Asked by the committee chairman, Andrew Tyrie MP, whether he supported the proposals put forward by MPs looking at standards and culture in the banking industry, the Lloyds boss said: “Yes, I do. I do support electrification as I did support ring-fencing.”

Chancellor George Osborne yesterday said he supported the beefing up of the original Vickers Commission proposals on ringfencing high street from so-called “casino banking” to forestall further taxpayer bail-outs.

Horta-Osorio added that it was “absolutely critical” for society to have electrified ringfencing for the banks, providing scope for enforcement if necessary, “from the financial stability and cultural points of view”.

On the mis-selling of complex derivatives products to small businesses, Horta-Osorio said Lloyds’s exposure was “not material”, and a provision of £90m would be taken regarding “less than 60 cases” identified at present.

 

Comments

 
 

Back to the top of the page

 

EDINBURGH
FESTIVALS
2014

#WOWFEST

In partnership with

Complete coverage of the festivals. Guides. Reviews. Listings. Offers

Let's Go!

No Thanks