£20m for Lloyds boss . . . even as spiralling PPI bill hammers profits
LLOYDS was last night embroiled in a fresh row over fat-cat salaries after handing its boss £20million in pay and perks in only two years.
Antonio Horta-Osorio received £8.5million last year, making him the highest paid bank chief executive in Britain for the second year running.
The huge award was described as ‘grotesque’ by trade unions and came as the state-backed bank revealed that its total bill for mis- selling payment protection insurance has climbed to £16billion.
The high street giant announced that it has been forced to set aside another £2.1billion to compensate customers – taking its total hit for the scandal last year to £4billion.
The spiralling bill – as well as a separate provision for mis-selling other products in branches such as packaged accounts – caused pre-tax profits to fall by 7 per cent to £1.6billion.
Lloyds provoked anger among unions after announcing a 6 per cent pay increase for Mr Horta-Osorio – taking his basic salary to £1.125million this year – while awarding a pay rise of only 2 per cent to ordinary workers.
His £8.5million package for last year, follows his £11.5million bonanza in 2014.
It includes a £1.06million basic salary, a £900,000 fixed shares award to dodge the EU bonus cap, and a £568,000 pension payment. He received an annual shares bonus of £850,000, which he will not receive until the Government sells its remaining stake in the bank.
Mr Horta-Osorio, 52, from Lisbon, was also handed £5.2million in shares from a previous long-term bonus.
Only £234,000 was docked from his pay package as punishment for the bank’s £117million fine last year for mishandling PPI compensation claims.
The bank defended Mr Horta-Osorio’s pay rise for this year, pointing out that his basic pay has been frozen since 2011 while staff had enjoyed annual rises. But Mark Brown, general secretary of Lloyds Trade Union, said: ‘For the CEO of Lloyds Banking Group to get a 6 per cent pay rise at a time when thousands of staff are losing their jobs and those that are remaining will only get 2 per cent is grotesque.’
John Mann, a Labour member of the
‘Where is the bonus for the taxpayer?’
Commons Treasury Committee, said: ‘This level of mis-selling makes the Great Train Robbery look like chicken feed. Why has no-one been held to account? Where is the bonus for the taxpayer?’
Mr Horta-Osorio has been praised for helping to turn around the bank since he took the helm in 2011. On his watch tax- payers’ stake in the bank has been cut from 43 per cent to less than 10 per cent – raising £16billion for the Treasury.
But more than 45,000 jobs have been cut since the financial crisis. A further 9,000 are being cut as part of a three-year plan to reduce costs and close 200 branches.
In total, the bank dished out £353.7million in bonuses to staff last year, down from £369.5million in 2014 –with 66 staff receiving one million euros (£800,000) or more.
The huge increase in the PPI compensation bill was triggered in part by the City watchdog’s plans to ban any more claims after spring 2018. Lloyds said it expects claims to rise but hopes to not have to set aside any more money for the scandal.
More than £6billion was added to Lloyds’ value yesterday as its shares soared by 13.6 per cent, to close at 70.6p. The bank’s decision to increase dividends to investors is thought to have driven the surge.
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