Lloyds lures Horta-Osorio with £13.5m pay package

THE cost of wooing new chief executive António Horta-Osório to Lloyds Banking Group was unveiled yesterday as its annual report revealed his total package was worth up to £13.5m.

His annual salary is £1.06m, increased from predecessor Eric Daniel’s £1.03m outgoing salary to reflect market rates. An additional sum worth up to three quarters of his salary will be pumped into his pension each year – adding up to £880,000 annually. His maximum bonus for the year would be 225 per cent of basic salary – around £2.4m. And he has been awarded shares worth 420 per cent of his base salary (£4.6m) for the first year of his long term incentive plan – more than a quarter higher than the 300 per cent limit imposed on other board executives – but a sum Lloyds said was “essential to the success of the recruitment process.”

Lloyds added that Horta-Osório would also be compensated for various share and cash awards which he had forfeited upon leaving his previous job as the head of Santander UK with shares worth around £4.1m – none of which vest immediately – and a cash payment of £516,000.

In addition, under the terms of the Project Merlin agreement between the banks and the government, the report also lifted the lid on the scale of rewards outside the boardroom of the bank. Five senior executives, likely to be dealmakers or traders, received between £1.4m and £4.8m.