On the go: Lloyds Banking Group is planning to cut the pensions allowance of its chief executive by more than £220,000, while increasing contributions to its staff.
António Horta-Osório’s receives a pension contribution of 33 per cent, while the maximum employer rate stands at 13 per cent for other Lloyds employees, making the bank a target of criticism.
According to the Financial Times, the lender has told shareholders it plans to give all staff an annual pension contribution of up to 15 per cent of their base salary from next year.
The change would reduce Mr Horta-Osório’s allowance by about £228,000, based on his 2019 salary.
The bank is yet to finalise its broader remuneration policy, but two people briefed on the shareholder discussions said it does not intend to offset the pension reduction with other pay increases.
Mr Horta-Osório faced MPs from the Work and Pensions Committee in a hearing in June, where he dismissed accusations of being greedy, and said his compensation is in line with other major bank chief executives.
The chief executive received total pay of £6.3m in 2018. For this year, he will be paid a guaranteed £2.8m, plus bonuses.
In November 2018, the Investment Association published its principles of remuneration, which set out investor expectations on executive pay and highlighted high pension contributions as a key concern.
The trade body stated that pension-related payments should not be used as a mechanism for increasing total remuneration, and pension contribution rates for executives should be aligned with those of the workforce.
A spokesperson for Lloyds said: “In line with the regular three-year review of the group’s remuneration policy, we are consulting shareholders on all elements of the policy including pension allowances.
“As stated before, the group will continue to support the guidelines set out by the IA and, once approved by the board, the proposed new remuneration policy will be presented to shareholders for approval at the 2020 AGM.”
