Eric Daniels, the chief executive of Lloyds Bank when it was bailed out with £20bn of taxpayer money during the 2008 financial crisis, is suing the bank for hundreds of thousands of pounds in disputed bonuses.
Daniels, who was heavily criticised by politicians during his tenure at Lloyds, has filed a legal claim to try to collect some of his bonus payments that were withheld by the bank.
He is thought to be suing the Lloyds, which he left in 2011 with a £5m pension pot, for as much as £500,000 in unpaid bonuses due in 2012. The Times, which first reported Daniels’ legal action, reported that sources with knowledge of the dispute said Daniels was taking action to claim performance-related bonuses that were not paid despite him hitting targets.
A spokesman for Lloyds said: “As this matter is a live legal issue, it would be inappropriate to comment.” A spokesman for Funding Circle, the peer-to-peer lender Daniels serves a non-executive director, was unable to comment on his behalf. A spokesman for Daniels declined to comment to the Times.
Daniels, a 66-year-old American, has already had millions of pounds of bonuses clawed back due to the bank’s misselling of payment protection insurance (PPI). During his tenure Lloyds was the biggest seller of PPI, and the scandal has so far cost the bank £18bn.
Daniels told MPs in 2013 he thought Lloyds was on “the side of the angels” on PPI and that most of the policies his bank sold to cover people during illness or unemployment were sold correctly. That year, the bank claimed back most of Daniels’s £1.45m bonus for 2010, leaving him with £300,000, as the bill for PPI claims mounted.
Daniels, who has been nicknamed the Quiet American in a nod to the Graham Greene novel, oversaw Lloyds TSB’s rescue of HBOS to form Lloyds Banking Group and a government bailout that left taxpayers owning 43% of the company at the height of the 2008 financial crisis.
In an interview with the Daily Telegraph in 2010, Daniels said he had done “the country a great service [by buying HBOS] by not costing the taxpayer a bomb”. Daniels was heavily criticised by the Treasury select committee in 2010 when it was revealed he did not know how many of his staff were paid more than him.
Since leaving Lloyds, Daniels has taken on a string of jobs in the City, including at the Mayfair boutique investment bank StormHarbour and the private equity firm CVC Capital Partners.
Truett Tate, a former colleague of Daniels who was head of the bank’s wholesale banking division, is also reported to be suing Lloyds for parts of his unpaid bonus. It is not known how much Tate is suing for. The Guardian was unable to locate Tate and his lawyers did not respond to requests for comment from the Times.
Lloyds finally emerged from partial state ownership in May when the government sold the last of its shares. Once operating in 30 countries, it now remains in just six, leaving it open to concern that it is vulnerable to any economic slowdown in the UK caused by Brexit.
This article was written by Rupert Neate, for theguardian.com on Tuesday 22nd August 2017 11.54 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010