Lloyds bonuses may face new bailout target

Tim Wallace
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LLOYDS’ chief executive may not receive this year’s bonus until the government’s stake in the bank is above the level it put into the institution, it emerged yesterday.

The bank’s remuneration committee is thought to be considering holding back the payment of Antonio Horta-Osorio’s bonus until the share price recovers beyond its bailout level.

They have not yet decided the level of that bonus.

The chief declined to comment on his likely payout, but told the Parliamentary Commission on Banking Standards he is aware of public anger over pay.

“We are very mindful of the general environment in financial services,” he said.

At the hearing Horta-Osorio revealed he disagrees with the British Bankers’ Association on ringfencing. Lloyds favours tough rules to enforce the partial separation of retail and investment banking, but the industry body opposes the plan.

“We are the only bank to publicly support the ringfence, and we support electrification,” he said. “It is absolutely correct that for society as a whole it is better for financial stability and from a cultural perspective to have a ringfence with strong enforcement and incentives.”

But the bank is not entirely in conflict with the BBA – Lloyds’ chairman Sir Winfried Bischoff called for a standards body to be set up with the powers to strike off errant bankers in the same way as bad doctors are banned from the profession, in line with proposals the lobby group is considering.

Horta-Osorio also said he wants a cut off date for PPI claims, arguing it would speed up the process, cut the costs from bogus applications from claims companies, and help the industry move on from the scandal.