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Lloyds avoids shareholder revolt despite anger over pay plans for bosses

UK News | Published:

The lender saw more than 8% of investor votes cast against its remuneration proposals for senior management.

Lloyds branch

Lloyds Banking Group has been taken to task by shareholders over its pay and pension plans for top bosses after being accused of “boundless greed”.

More than 8% of investor votes were made against the bank’s pay proposals for bosses at the lender’s annual shareholder meeting in Edinburgh.

A further one billion votes were withheld.

But the bank avoided a full-blown revolt over pay despite mounting anger over chief executive Antonio Horta-Osorio’s pension deal ahead of the event.

Antonio Horta-Osorio
Lloyds defended boss Antonio Horta-Osorio’s pay package (PA)

Lloyds saw 91.95% of votes made in favour of its overall pay plans at the AGM, which marked an improvement on last year’s result when a fifth of shareholders voted against its remuneration report.

All members of the Lloyds Banking Group board were also re-elected at Thursday’s event.

It comes after MPs on Wednesday accused the firm of “boundless greed” over its pension plans for Mr Horta-Osorio.

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Frank Field, chairman of the Commons Work and Pensions Committee, launched a scathing attack on the group amid reports its management released a video to employees in an attempt to garner support for pay deals ahead of the AGM.

But investors also took aim at the board over pay at the event.

One shareholder said: “Greed is good – no it’s not. It’s not good for the individual or for society.

“Fair pay is good. Paying people hundreds of thousands and even millions of pounds a year where we have food banks and people on benefits is wrong in a civilised society.”

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Chairman Lord Blackwell sought to defend Mr Horta-Osorio’s £6.27 million-a-year pay deal.

He said the chief executive and other directors have “earned through their performance the rewards that they are entitled to”.

He added: “Let me be clear – our view is we should and need to pay for performance.

“Not many people would do the arduous hours and arduous tasks they do for free.”

Lord Blackwell also admitted the criminal activity uncovered 10 years ago at the group’s HBOS Reading arm had shaken confidence in the lender.

He said the bank recognises the scandal “not only had a damaging impact” on victims, but also “cast a long shadow” on the wider Lloyds group and undermined trust in it.

TV’s Noel Edmonds – one of the most high-profile victims of the fraud – appeared at the AGM to question the board over the affair.

Edmonds is pursuing Lloyds separately for losses allegedly suffered when his former business Unique Group was destroyed.

Noel Edmonds
Noel Edmonds questioned the board during the AGM (PA)

Lloyds has also come under heavy fire over pensions, following the revelation that Mr Horta-Osorio’s pay included a pension contribution of 46%, compared to a 13% maximum for other employees.

In February, he voluntarily reduced his pension contribution to 33%.

But anger has refused to die down, with the Investment Association issuing its second-highest warning against the bank over the issue, while influential shareholder advisory group Pirc also recommended investors vote against Mr Horta-Osorio’s “highly excessive” pay plans.

Ahead of the event, Lloyds had also announced plans to pay quarterly dividends from next year.

The banking giant said it will pay dividends from the first quarter of 2020 to provide its 2.4 million shareholders with more regular returns.

The lender will pay out three equal payments in the first three quarters followed by a bumper dividend in the fourth quarter. It currently pays dividends twice a year.

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