Lloyds Bank defends pay strategy
Lloyds Bank has today been forced to defend its pay strategy which many in the political arena believe is too generous bearing in mind the current state of the business. Even though chief executive Eric Daniels turned down his multimillion pound bonus for 2009 there is concern that the Bank even considered paying out such a bonus when UK taxpayers are still billions of pounds out of pocket.
Many believe that the furious reaction from investors, politicians and UK taxpayers was the main reason for the recent reorganisation of the company's remuneration committee - the company appears to have made the former chairman the fall guy in the eyes of the city. No matter how unpopular, the truth is that unless Lloyds Bank is willing to pay a "decent" salary and overall remuneration package to the best names in industry the company will not be as competitive as others.
We have seen a sea change in the attitudes and actions of institutional shareholders over the last two years with more and more companies and company directors being held to account for the performance of their operations and remuneration packages. Lossmaking companies are finding it more and more difficult to pay out large bonuses with institutional shareholders now willing to vote against such deals.
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