Lloyds makes bonus raid on former execs

published 16 March 2012

It seems as if some former directors of Lloyds will be putting the champagne firmly back on ice.

According to press reports, several ex-board members at the state-backed bank will not be paid share awards resulting from an incentive plan introduced in the wake of the merger with HBOS back in 2009. The awards were triggered by the squeezing out of £2bn of annual costs from the business, a goal achieved in 2011.

Former Chief Executive Eric Daniels, Helen Weir (formerly head of Lloyds' retail estate), Archie Kane (former head of the insurance business), and Truett Tate (corporate banking) had been set to receive around £2.2m in shares, with Daniels in line to pocket around £0.84m in shares. Daniels's replacement, Antnio Horta-Osrio, trousered £1.9m in 2011, including £0.9m of bonus and pension payments.

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The merger with HBOS was disastrous, as Lloyds suddenly found itself not only acquiring its rivals' high street network but also its enormous debts. The government had to step in to save the merged entity, costing the tax payer around £17bn for a stake of around 40%, although defenders of Daniels's reputation that it was the government that bounced Lloyds into doing the deal in the first place.

Lloyds Banking declined to give a reason for not granting the awards to former directors, but it has some form in this regard; in February Lloyds forced several current and former executives, including Daniels, to pay back around £1.5m in bonuses as a result of the mis-selling of Payment Protection Insurance (PPI).