More than £2m in bonuses have been given to top managers of Lloyds Banking Group, just weeks after the bank was hit with a £117m fine for mishandling payment protection insurance compensation claims.
The bank – in which the taxpayer has a stake of just under 17% – withheld £2.6m of bonuses following the fine from the Financial Conduct Authority, which covered the period 2012 and 2013.
But on Thursday, Lloyds released shares from bonuses deferred from those two years which had not been withheld. The dozen or so members of the executive committee had on average about 25% of their bonus withheld, while the the chief executive, António Horta-Osório, had £350,000 docked. Horta-Osório was not included in Thursday’s announcement.
In total, shares worth just over £2m were handed to 10 top managers at Lloyds, including the finance director, George Culmer. The bank did not spell out what portion of the share awards related to 2012 or 2013, while some also related to the 2014 financial year.
The FCA fined Lloyds after finding had failed to treat customers fairly when complaints were made over the insurance product. The fine was the largest the City regulator has levied in relation to the mis-selling of PPI, but Lloyds has also incurred costs of more than £12bn for the scandal.
The bank also revealed it handed out just over £1.1m of shares as a quarterly instalment of a so-called fixed share award. This was put in place to sidestep the EU’s cap on bonuses. The cap limits bonuses to one times salary – or twice if shareholders approve – so many banks have been handing out fixed amounts of shares alongside salaries to prevent overall pay levels falling. Horta-Osório was awarded 136,880 shares, after tax and national insurance payments, worth around £120,000.
This article was written by Jill Treanor, for theguardian.com on Thursday 25th June 2015 17.52 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010