Friday 24 March 2017

Lloyds chief Daniels will forego £2m bonus for 2009 results

Simon Packard

ERIC Daniels, chief executive of bailed-out Lloyds Banking Group, has waived his right to a 2009 annual bonus of more than £2m, bowing to growing pressure on bank bosses.

The move comes after his counterpart Stephen Hester at part-nationalised, loss-making Royal Bank of Scotland chose to forgo his payout, and follows similar decisions by the top bosses at Barclays, despite bumper profits.

Daniels - the only boss of a rescued UK bank to have retained the top job through the crisis, and one of few worldwide - is still in line to receive a salary of more than £1m, under a contract that pre-dates Lloyds' merger with troubled rival HBOS last year.

Anger over "fat cat" banker pay has become a major political issue in Britain in the run-up to an election expected in May, particularly with respect to banks rescued by taxpayers still making losses as they emerge from the credit crisis.

Lloyds, 41pc state-owned, said it was mindful of public sentiment, but said its remuneration committee had decided Daniels deserved the full payout "because of his significant individual contribution" and Lloyds' performance.

"Mr Daniels has informed the board, however, that he wishes to waive his bonus, the second consecutive year that he has done so," Lloyds chairman Win Bischoff said in a statement.

"Mr Daniels has taken this action because he believes that the excellent progress the Group is making, based on the considerable contribution of many colleagues across the company, is in danger of being obscured by the current debate on executive bonus awards in the banking sector."

(Reuters)

A showdown over Daniels' pay -- and any indication he profited personally from the HBOS deal -- could also have prompted calls from shareholders for the former Citibank veteran to step down from the helmMeanwhile,Bank of Scotland CEO Stephen Hester has decided to forgo any bonus awarded to him for 2009, it is understood.

Mr Hester (49) is scheduled to release the bank's results on Thursday for 2009, the first full year since he took over as CEO in November 2008.

RBS is now 84pc owned by the British state.

He joined RBS on a package entitling him to as much as £9.74m (€11m) if the share price doubled.

A spokesperson for the bank declined to comment.

It has been reported that while RBS may report a loss for last year, Mr Hester would still be entitled to collect £1.6m (€1.8m) in bonuses.

That led Britain's business secretary Peter Mandelson to say in a TV interview that such a payment would be premature.

"If further down the line, in years to come, he (Mr Hester) has done well and turned around RBS, he deserves something back for it, but not now," he said.

Refused

Mr Hester's decision on his bonuses follows those of Barclays CEO John Varley and its president, Bob Diamond, both of whom refused bonuses for the second year in a row.

The decisions by the heads of Barclays and RBS to waive their bonuses will increase the pressure on Lloyds CEO, Eric Daniels, to follow suit.

Mr Hester has an annual salary of £1.2m (€1.36m). RBS shares must rise to 70p and outperform peers for him to receive the full amount of shares and options in his pay deal with the company, RBS said last June.

Irish Independent

Promoted articles

Also in Business