It seems that Lloyds Banking Group is so desperate to secure enough votes at next week’s AGM that it’s produced a glossy video urging staff to use their votes for the first-time. And let’s be clear, the bank wants staff to support the re-election of executive directors and, more importantly, the Bank’s Remuneration report. Last year some 20% of shareholders voted against the Group’s Remuneration report and a similar figure this year would be humiliating for the board, and could lead to some resignations.
According to the bank, staff have more that 700 million shares, or 1% of the share capital, and they should use their votes to support the board. Malcolm Wood, the Group’s Company Secretary, says on the video: “Now again one per cent doesn’t sound like very much but one per cent is more than most of our institutional shareholders have got. So, actually, if we all vote it makes a huge difference”.
Members will be aware that the Investment Association (IA), has highlighted serious concerns about the pension allowances awarded to Mr. Antonio Horta-Osorio, Group Chief Executive, Mr. William Chalmers, Chief Financial Officer designate and Mr Juan Colombas, Chief Operating Officer. The Group’s Remuneration report has been ‘amber’ topped by the IA and the board must be worried that the vote is too close for comfort.
It is for members to decide how they vote or if they vote at all. We would simply make one point. The Group has said that the Chief Executive’s pension allowance will be reduced from 46% to 33% of base pay “to bring this closer to that of the majority of colleagues”. The vast majority of staff get a pension allowance of 13%. And to compensate Mr Horta-Osorio for the reduction in his pension allowance, the Remuneration Committee has increased his fixed share award – which he gets simply for turning up to work – from £900,00 to £1,050,000. That is morally unacceptable. How much is enough for one person? An employer pension allowance of 13% of base salary, would still give Mr. Horta-Osorio a pension of £165,007. That’s more than enough for anyone, especially someone with outstanding share awards worth £18,582,000.
Members with any questions on this Newsletter can contact The Union’s Advice Team on 10234 262868. A copy of the letter from the Investment Association is on the union’s website.