Lloyds chief set for bigger bonus

”Lloyds

Lloyds Banking Group has announced plans to award its chief executive, Eric Daniels, £2.85 million in shares.

However, the share incentive only comes to fruition if stock in the state-owned bank goes above the 114p mark in the next three years.

The award is in addition to his £1 million salary and the maximum £2.3 million annual bonus.

However, the bank said it would mean considerable value generated for the state, after £20 billion of taxpayer money was invested at an average of 73.6p.

The shares fell 0.86 to 64.05p on Friday.

Lloyds, which is 41% owned by the taxpayer, last month posted a full-year loss of £6.3 billion and Mr Daniels said he would waive his £2.3 million annual bonus for a second year.

For some time now, bank bonuses have sparked public anger and have been the subject of heavy criticism since many believe their risks led to the recession.

However, the new arrangements mean Mr Daniels could see a total pay package of more than £6 million.

The bank said the new incentives were agreed after consultation with the UK Financial Investments (UKFI), the body which was set up at the height of the financial crisis to oversee taxpayers’ interests in High Street banks.

In related news, last week the banking giant said it will return to profitability in 2010.

“Overall, based on the group’s current economic and regulatory assumptions which remain unchanged since our recent 2009 preliminary results announcement, the group believes that it will be profitable on a combined businesses basis in 2010,” Lloyds said.

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