Former Lloyds chief Eric Daniels wins dispute with bank over unpaid bonuses
The claim relates to performance-related payouts due in 2012 that were not paid to Mr Daniels.
Eric Daniels, the former chief executive of Lloyds Banking Group, has won a legal dispute with the lender that will see him net up to £1.34 million in unpaid bonuses.
Mr Daniels, who was at the helm when Lloyds received a £20 billion bailout from the taxpayer in 2008, filed a legal claim last year to scoop up bonus payments that had been withheld.
It relates to performance-related payouts due in 2012 that were not paid to Mr Daniels despite the former bank chief hitting pre-ordained targets, namely the successful integration of HBOS.
Lloyds has been challenging the payout but, according to papers filed at the High Court, Mrs Justice Cockerill found that its “defences have no real prospects of success, and that the claimants’ applications for summary judgment succeed”.
It paves the way for Mr Daniels to be paid over two million shares, which at today’s stock price amount to around £1.34 million.
Mr Daniels left the bank in 2011 with a £5 million pension pot.
The former banking chief was advised by Tom Custance and Jane Man, partners from law firm Fox Williams.
In addition, former head of Lloyd’s wholesale division Truett Tate, stands to pocket 1,424,778 shares, worth over £900,000.
Lloyds is not expected to challenge the ruling, with a statement from the bank saying: “We accept the court’s decision and now consider this matter closed.”
Fox Williams said in a statement: “The court comprehensively upheld Mr Daniels’ contractual entitlement to his award.
“This was dependent on satisfying a number of objective performance conditions, all of which were fully met.”
The high profile claim related to a long term incentive plan linked to the successful integration of Halifax Bank of Scotland (HBOS) into Lloyds Banking Group between 2009 and 2011.
But controversy surrounds the £2 billion takeover, which is seen as marking the start of the lender’s troubles during the financial crisis, with HBOS having saddled Lloyds with heaps of toxic assets stemming from risky bets made by HBOS on commercial property during the boom years.
The Government subsequently upped the bailout funds pumped into Lloyds to £20.3 billion, taking a 43% stake.
Despite its best efforts, the fallout from the deal would shake Lloyds to the core.
Its chairman Sir Victor Blank resigned, bad debts reached tens of billions of pounds and the bank recorded hefty losses as it pushed through a radical turnaround plan that led to thousands of job cuts.
However, the lender moved back into the black by February 2011, just two years after recording a £6.3 billion loss – shortly before Mr Daniels was replaced by Santander boss Antonio Horta-Osorio, who was tasked with overseeing the lender’s revival and returning it to private ownership.