Lloyds pays 25 staff more than $1.5-M each
LONDON - Britain's part-nationalized Lloyds Banking Group paid 25 staff more than 1 million pounds ($1.5 million) each in 2012, a year in which it set aside billions of pounds to compensate customers mis-sold loan insurance.
The bank, which is 39 percent owned by the UK taxpayer, said on Monday it paid bonuses worth a total of 365 million pounds in 2012, down 3 percent on the previous year and the lowest of the big four British lenders.
That equated to an average 3,900 pounds for each of the bank's employees.
Bankers' pay has come under intense scrutiny following a year of scandals including interest rate-rigging, breaches of anti-money laundering controls and mis-selling.
Despite that, Barclays paid 428 bankers more than 1 million, HSBC did the same for 204 employees and Royal Bank of Scotland handed million pound-plus pay deals to 95 staff.
Lloyds said Chief Executive Antonio Horta-Osorio had been awarded an annual bonus worth 1.5 million pounds, paid in shares.
He will only be able to sell the shares if the government disposes of at least a third of its shareholding at a price above 61 pence, or if Lloyds' share price trades at 73.6 pence or above for a given period of time.
Shares in Lloyds closed at 47.8 pence on Monday, leaving taxpayers sitting on a paper loss of 7 billion pounds.
The government has said it could break even selling its shares at 61 pence, stock which it acquired when it rescued the bank during the 2008 financial crisis.
The break-even price takes account of fees the government has already received from the bank which it bought into at 73.6 pence.
Lloyds said it had also awarded Horta-Osorio shares under a long-term incentive plan with an expected value of 1.1 million pounds. Horta-Osorio receives a basic salary of 1.2 million.
Lloyds said 20 staff earned between 1 million and 2 million pounds in 2012. Five were paid between 2 million and 3 million.
In its annual report, Lloyds said it was co-operating with government agencies investigating a global interest rate rigging scandal. The bank said it was not possible to predict the timing and scale of the potential impact from the investigations.
Barclays was fined $453 million last June for its role in the affair and Royal Bank of Scotland was hit with fines of $612 million in February this year.
Lloyds has set aside 6.8 billion pounds to deal with claims from customers mis-sold payment protection insurance (PPI) on loans and mortgages and 400 million pounds to compensate small firms wrongly sold complex interest-rate hedging products.
Lloyds, which has raised its PPI provision five times, said the rate of complaints being received was now declining.
The bank paid out around 200 million pounds a month in the fourth quarter of 2012, about 25 percent lower than in the third quarter.
Lloyds expects the monthly payout to fall by around 20 percent in the first half of 2013 and fall further in the second half.
Like other British banks, Lloyds is under pressure to rein in executive pay and cut costs. In response to the PPI affair, the bank said it planned to claw back bonuses awarded to some directors in 2010.
Former Chief Executive Eric Daniels attracted criticism in February when he defended the sale of the products, saying that most had not been mis-sold.