In the current financial crisis that has dominated worldwide headlines for much of the past year, it has been highlighted that the pay ‘gap’ has meant those on high wages are getting wealthier while people with a more modest pay packet are left struggling to cope. However, the Chief Executive of Lloyds Banking Group, Antonio Horta-Osorio, has today defied this trend by declining his annual bonus.
Mr Horta-Osorio, who has just returned from two months of leave due to fatigue, became a board member of Lloyds in January 2011, and accepted the Chief Executive job two months later in March. Under the group’s current policy, he receives a basic annual pay of £1.06 million, and is able to make up to 225 per cent above this in bonuses.
In a statement to the press, Mr Horta-Osorio said that his extended period of absence could have negatively affected the performance of the bank, and therefore he would not be accepting his bonus.
He also acknowledged “the tough financial circumstances that many people are facing”, and stated that the bonus he was eligible to claim should be an accurate reflection upon the performance of the group.
He continued to say “My leave of absence has had an impact both inside and outside the bank, including for shareholders.”
Lloyd’s members have accepted his decision, with Chairman Sir Winfried Bischoff claiming that “Under Antonio’s leadership, the bank made significant progress last year in its transformation against a very difficult economic backdrop.”
However, Mr Horta-Osorio’s bonus will not go far in terms of losses incurred by the bank last year – in the first nine months of 2011, Lloyd’s made a massive £3.9 billion loss, and is expected to miss financial targets, which it claims to be down to the tough economic outlook.
Shares in Lloyds were also one of the worst performing stocks last year, with a 60 per cent slump overall. This left the British Government, which owns 40 per cent of the bank, reeling from a £12 billion loss following the £20 billion bailout at the height of the banking crisis.
