Banking: Lloyds lifts bonus payout by 8% following return to annual profit
PUBLISHED: 09:29 13 February 2014 | UPDATED: 09:29 13 February 2014
Lloyds chief executive Antonio Horta-Osorio is in line for a potential shares bonus worth £1.7million for 2013 and staff will share a £395m payout after the group today reported a return to the black.
The taxpayer-backed lender said Mr Horta-Osorio’s windfall was deferred for five years and dependent on performance conditions. The wider staff bonus pot is 8% higher than the £365m paid out for 2012.
Details of the bonuses came as Lloyds posted bottom line profits of £415mn for 2013, against losses of £606m in 2012, and said underlying profits more than doubled to £6.2billion.
This came despite a soaring bill for mis-selling compensation, which was revealed alongside headline profit figures in a shock update earlier this month.
Mr Horta-Osorio said he would take his bonus for 2013, despite decisions by his counterparts at Barclays and Royal Bank of Scotland to waive their annual payouts.
However, the bonus is still dependent on the Government selling another 50% of its remaining 33% stake or the share price holding above 73.6p, the average price paid by the Government when the bank was rescued, consecutively for six months.
He defended the decision to increase the overall staff bonus pool in the face of calls for a cut following another £1.8bn set aside for payment protection insurance (PPI) compensation and the group’s record £28m fine in December over incentive schemes rewarding staff with “champagne bonuses” that drove mis-selling.
Lloyds said the potential staff bonus pot had seen a “material” reduction to reflect mis-selling provisions and December’s fine, while the group’s remuneration committee is also due to discuss clawback of past payouts to individuals relating to the Financial Conduct Authority penalty at the end of last year.
Mr Horta-Osorio added that the bonuses reflect the “excellent progress” made over the last year.
The payout means the majority of staff, around 91,000 employees, will receive payouts averaging £4,500 each, although cash handouts are capped at £2,000 and bonuses are fully deferred for directors.