Lloyds heads off pay revolt at AGM after ‘greed’ attack

● Bank announces plans to pay quarterly dividends to shareholders from next year

Bank of Scotland owner Lloyds Banking Group yesterday avoided a full-blown revolt over executive pay at its annual general meeting (AGM) as its chairman stressed it needed to “pay for performance”.

Just over 8 per cent of votes went against the bank’s pay proposals for boss es at the meeting in Edinburgh, which came a day after MPS accused the firm of “boundless greed” over its pension plans for chief executive Antonio Horta- Osorio. However, despite the criticism, the pay plans of the group saw increased backing compared with last year’s result when a fifth of share - holders voted against the remuneration report.

Before the vote, chairman Lord Blackwell sought to defend Hor ta- Osorio’s £6.27 million-a-year pay deal.

He said the chief exe cutive 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.”

Ahead of the AG Matt he EICC, Lloyds also announced plans to pay quarterly dividends from next year in a move aimed at providing its 2.4 million shareholders with more regular returns.

It will pay out three equal payments in the first three quarters followed by a bumper dividend in the four th. It currently pays dividends twice a year.

On Wednesday, Frank Field, chairman of the Commons work and pensions committee, had launched a scathing attack on the group over its pay deals for executives, and investors also took aim at the board at yesterday’s meeting.

Lloyds, which is also behind Scottish Widows, has come under heavy fire over executive pension sin par ti cular following the revelation that Hor ta- Osorio’s package included a pension contribution of 46 per cent, compared with a 13 per cent maximum for other employees.

In February, he voluntarily reduced his contribution to 33 per cent. 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 advisor y group Pirc also recommended investors vote against Hor ta- Osorio’s “highly excessive” pay plans.

At yesterday’s meeting, one shareholder said: “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.”

The board also faced questions, including from TV’ s Noel Edmonds, over the fraud case uncovered ten years ago at the group’s HBOS Reading arm.

Lord Blackwell admitted the criminal activity 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.