Lloyds wins backing for CEO’s pension — but 10% of shareholders dissent

Lloyds Banking Group, which was blasted this week by MPs for “boundless greed” over its bosses’ pay and pensions, has won approval from shareholders — though 10% declined to support the payouts

The chairs of parliament’s business and pensions committees, Frank Field and Rachel Reeves, started questioning Lloyds on May 2 over the generous pension contributions paid to chief executive António Horta-Osório; at a rate of 33% of salary, they are more than double the 13% rate paid to other employees

On May 14, the MPs published Lloyds’ responses to their queries alongside further criticism, with Field denouncing the bank’s justifications as a “litany of excuses”

Lloyds shareholders gave their verdict at the bank’s annual shareholder meeting on May 16. Around 10% of shareholders declined to support management, with 8% voting against and 2% abstaining, according to results released by the bank.

Shareholder adviser ISS had recommended a vote in favour of management, though it made clear in its report it was offering only “qualified support” — as Horta-Osório’s pension reduction was balanced by a significant increase to his share allowance.

Nevertheless, its stance likely proved significant in containing the rebellion, which was significant, but not large. An oppose vote of 20% or more is recognised as material by the Investment Association, the trade body for UK fund managers. Politicians’ attacks come as pressure increases on company bosses who receive vastly more generous pension payments than their staff. The Investment Association has mounted a campaign on the issue this year, and scored notable wins at HSBC and Aviva.

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