The announcement by the 33% taxpayer-owned bank covers awards of bonuses for 2013 and 2014 – some of which do not pay out for three years – and follows its disclosures earlier this month that its senior executives shared £12m of bonuses that had paid out from previous years.
It comes amid a sharpened focus on bankers' pay following a series of mis-selling scandals and attempts by the major banks to sidestep the EU bonus cap which restricts bonsues to 100% of salary or 200% if shareholders approve.
The latest handouts by Lloyds include 2.1m shares for Horta-Osório – worth £1.7m at current share prices – for his bonus for 2013 which is linked to the share price remaining above 73.6p for 123 consecutive days. The price of 73.6p is the average paid by the taxpayer for its stake in the bank following its rescue of HBOS and bailout in 2008.
Horta-Osório is also receiving 4.6m shares through a long-term incentive plan, or LTIP, which could pay out in 2017 – worth as much as £3.7m at the current price of 78p – although the bank calculated that the expected value of the scheme is £1m because of performance criteria attached, which could cut the number of shares.
The Lloyds boss is one of eleven members of the top management team to receive awards under the LTIP. The shares are worth £20m at current share prices but the bank calculates the value of the scheme at closer to £6m because of the performance conditions.
On the basis of Lloyds' calculations, taking into account the so-called expected value of the awards, the latest share handouts total £14m, rather than £27m.
A total of £4.7m in shares was handed to eight members of the management committee as bonuses for 2013 which can be cashed in from June this year.
A Lloyds Banking Group spokesperson said: "The 2013 awards reflect the strong performance of the group, including the 65% increase in share price and taxpayers beginning to get their money back through the start of the sell down of the government's stake. Going forward, our remuneration structure, including the deferral of awards, will help to ensure that the incentives of senior management are aligned with the interests of shareholders."
The payouts by Lloyds come after Royal Bank of Scotland has paid out a potential £23m to its top management team, led by Ross McEwan who is now facing pressure to accelerate the sale of the US arm of the 81% taxpayer-owned bank.
Shares in RBS jumped 4.5p to 303.6p after it was reported that it was in talks to sell Citizens, the US operations, to Japan's Sumitomo Mitsui. RBS declined to comment but has said in the past that it is working on a stockmarket flotation of Citizens after moving finance director Bruce van Saun to run the operation.
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