LLOYDS Banking Group investors yesterday breathed a sigh of relief after the bank managed to lure Santander’s highly-respected UK chief António Horta-Osório to replace departing chief executive Eric Daniels.
The appointment, which came as a bolt out of the blue, was immediately viewed as a coup by those who doubted Lloyds’ ability to attract a high-calibre new chief, given the dominant influence of the government on its strategy and remuneration culture.
Horta-Osório will take a substantial pay cut to join Lloyds, though at face value his new remuneration package of up to £8.3m looks generous indeed. He will receive the same annual salary and maximum bonus as Daniels, worth £1.035m and £2.3m respectively, a £610,000 pension allowance and a maximum long term performance-based incentive plan worth £4.35m at today’s share price, which will only vest in full if “stretching targets are exceeded by a significant margin”.
Horta-Osório said the “emotional decision” to leave Santander was sealed by the irresistible challenge of leading Lloyds to the next stage of its development. “I strongly believe that it is impossible to have a strong economy without a strong banking sector, and vice versa,” Horta-Osório said.
Daniels will step down in March but will stay on in an advisory role until September. He will have accrued a pension pot of well over £4m by the time he leaves.