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Lloyds To Boost Fixed Pay Awards To Beat EU Bonus Cap

LONDON (Alliance News) - Lloyds Banking Group PLC Wednesday said it will grant Chief Executive ...

Alliance News 5 March, 2014 | 4:18PM
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LONDON (Alliance News) - Lloyds Banking Group PLC Wednesday said it will grant Chief Executive António Horta-Osório GBP900,000 in extra fixed shares in 2014 as it seeks to make sure new EU rules on bonuses don't result in a drop in his salary.

Lloyds' 2012 annual report showed Horta-Osório will receive the shares on top of a base salary of GBP1.1 million, a bonus worth up to 140% of base salary and a maximum award of 300% his salary under the bank's long-term incentive plan.

Outgoing Winfried Bischoff said the recent change in EU rules that cap variable remuneration at 100% of fixed pay, or 200% with shareholder approval, meant the bank introduced the fixed share awards, which will be paid over five years. The bank will seek shareholder approval for the awards at the 2014 annual general meeting.

The bank said it will also seek shareholder approval to pay up to 200% of base salary in bonuses in 2014, with its Remuneration Committee stating that it, "strongly believes in pay for performance" in order to attract talent.

Horta-Osório, who received a GBP1.7 million bonus for 2013, payable in shares with a five-year deferral period, has overseen a recovery at Lloyds in the past year, with the bank swinging to a GBP414 million pretax profit from the GBP606 million pretax loss in 2012.

His bonus, which made up part of an 8% increase in the bank's 2013 bonus pool to GBP395 million, was part of a total remuneration package of GBP7.5 million in 2013. In 2012 his total remuneration was GBP3.4 million.

Cash bonuses are capped at GBP2,000 with additional amounts paid in shares and subject to deferral and performance adjustment.

Lloyds shares were Wednesday quoted at 80.89 pence, down 0.01%.

By Samuel Agini; samagini@alliancenews.com; @samuelagini

Copyright © 2014 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Lloyds Banking Group PLC 58.69 GBX -1.51

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