Lloyds linked to 10-year pay plan

Lloyds TSBLloyds Banking Group is reportedly mulling a shake-up of pay that could see it ditch annual bonuses for senior staff and extend long-term incentives to up to 10 years.

The 40% state-owned lender raised the proposals with investors in a bid to calm some of the shareholder anger over pay that has built up in the last year, the Financial Times said.
Lloyds is thought to be considering new trigger points for payouts, including one relating to the bank's share price hitting the average price of 74p, equivalent to the price paid by the Government for its stake.

The scrapping of annual bonuses and the 10-year timeframe for payouts, compared with the standard three years for typical long-term awards, were the most radical of a range of options.

A Lloyds Banking Group spokeswoman said: "We keep our remuneration plans under review at all times but have no current plans to change our structures and do not expect to do so in the foreseeable future."

Some of Britain's biggest companies - including banks - were subject to a shareholder spring earlier this year, which saw a series of rebellions over pay.

Barclays was stung when nearly a third of shareholder votes failed to back its pay awards, largely driven by anger over a huge deal for former chief executive Bob Diamond.

Insurer Aviva, British Gas parent Centrica and advertising giant WPP all faced similar protests over their own pay plans as the issue of remuneration came under increased scrutiny from shareholders and politicians alike.

Lloyds avoided such a rebellion at its own annual meeting earlier this year, where some 97.6% of shareholder votes backed its remuneration report.

But its executive pay is on a par with rivals, with chief executive Antonio Horta-Osorio's package, comprising salary, annual bonus, long-term incentive plan and pension, totalling around £8.5 million depending on performance.

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