The boss of Lloyds Bank is set to give up half his annual pension allowance after staff and shareholders expressed outrage at the gap between his pension and those of other Lloyds employees.
The bank is consulting with shareholders on slashing Antonio Horta-Osorio’s pension by almost £230,000, to bring it in line with others at the company.
Mr Horta-Osorio, who joined Lloyds from Santander in 2011, has been criticised by shareholders and staff for his pension. The chief executive can get up to 33% of his basic salary as a pension, compared with an average of 13% at the bank.
He already took a cut from 46% in the company’s last annual report as the bank tries to get in line with Investment Association (IA) guidelines. Now the bank is discussing whether to slash that further to 15%. The story was first reported by the Financial Times.
Lloyds bosses have also asked shareholders what they think about a plan to increase the average pension contributions for rest of its staff to 15% from 13%. This is likely to cost the bank in the region of £20 million a year.
The IA recommends that staff and chief executives should expect the same proportion of their salaries in pensions.
“In line with the regular three-year review of the Group’s remuneration policy, we are consulting shareholders on all elements of the policy including pension allowances,” a spokesperson for the bank said.
In June, the board member who deals with executive pay at Lloyds told MPs that Mr Horta-Osorio is a “winner” who deserves the perks.
Stuart Sinclair said that staff did not resent the money that the chief executive takes home every year. Last year his total pay was worth nearly £6.3 million.
It is now consulting on Mr Horta-Osorio’s pay. After talking to shareholders a proposal will be put to the board before being voted on by shareholders around May next year.
“As stated before, the group will continue to support the guidelines set out by the Investment Association and, once approved by the board, the proposed new remuneration policy will be presented to shareholders for approval at the 2020 AGM,” Lloyds’ spokesperson said.