Pressure on Horta-Osorio as RBS and Barclays shun clawbacks
Tuesday, 21 February 2012 10:06
The Royal bank of Scotland (RBS) and Barclays are not planning on following the example of Lloyds by trying to claw back banker bonuses awarded in previous years.
Lloyds announced on Monday that it would strip ten senior staff including former chief executive Eric Daniels of around £2million of deferred bonuses. The move came as a result of their involvement in the payment protection insurance (PPI) scandal that has significantly contributed to the annual loss Lloyds is expected to announce later this week when it presents its 2011 financial results on Friday.
Mr Daniels was stripped of 40 per cent of his £1.45 million bonus for 2010, amounting to £580,000. Four other directors will have to hand back 25 per cent of their bonus and eight more directors below board level have to pay back five per cent.
RBS and Barclays were not as heavily involved in the PPI market as Lloyds and the two banks say that the effects of mis-selling of PPI at their banks will be reflected in the 2011 bonuses. RBS made an £850m provision in its accounts for PPI, whilst Barclays took a £1billion charge.
Meanwhile Lloyds is coming under further pressure for its chief executive, Antonio Horta-Osorio to hand back his signing-on award of £4.6m in shares that was awarded to buy him out of his incentive plans with his previous employer Santander.
Mr Horta-Osorio had been chief executive of Santander for three years before it decided to stop selling PPI in 2009. Therefore part of the incentive plan that Lloyds paid £4.6 million to buy him out of would have been linked to performance in that time, part of which would have been affected by the profits Santander made on selling PPI. Santander had to make provision of £731m in its 2010 accounts as a result of PPI mis-selling.
Mr Horta-Osorio has already agreed to waive his bonus for 2011 as he was on an extended leave of absence for a period towards the end of 2011 due to exhaustion. Mr Horta-Osorio also did not receive a bonus from Santander in 2010.
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