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Lloyds to clawback senior exec bonuses over PPI misselling

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Lloyds Banking Group is set to strip directors of more than £1m in bonuses over their role in the misselling of payment protection insurance.

Former Lloyds chief executive Eric Daniels will lose at least £360,000 of his 2010 bonus, while a number of other directors are each set to lose around £250,000, according to reports.

The Telegraph says the move marks the first time a UK bank has exercised a “clawback” option on executive pay since the financial crisis began.

Banks have been forced to set aside almost £6bn in provisions for the misselling of PPI after losing a High Court case to stop customers demanding compensation last April. Lloyds set aside £3.2bn for payouts.

Others set to lose out include outgoing finance director Tim Tookey, who will forgo £235,000 of his £942,000 bonus and former head of the retail bank Helen Weir, who will lose £218,000 of her £875,000 bonus.

Lloyds results are due this week although The Telegraph suggests the move may be inserted as a clause in the banks’ annual report next month. The bank is able to claw back the bonuses, which are made in shares, because the award was released over three years, so future payments will now not be made.

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Readers' comments (8)

  • Very appropriate - and I look forward to seeing similar actions imposed where Banks sold 100% capital protected structured products - and where investors still await the return of their so-called fully protected capital.. Misselling was certainly not restricted to PPI...

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  • Encouraging news until you realise that the bonus payment was to be made by way of shares they will not now get. I do not think the FSA accepts this type of arrangement to settle their fines.

    This is not a clawback as IFAs will well understand. You can only clawback what you have had.

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  • So they'll lose about 25% of their bonus leaving a paltry half-a-mil - don't you feel sorry for them ?

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  • i have nothing against the banks, but Lloyds should have been treated as if it had gone into the PPF as should have RBS. This would be equitable rather than this emotional banker bashing

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  • So where's the finds from the FSA or banning orders or even criminal procedures as I see this as fraud on a massive scale. After all the reclaim the bonuses is a drop in the ocean compared what these guys have been paid in the past.

    You will only change behaviour of the major banks if the above action is taken.

    SET SOME EXAMPLES FOR GOD SAKE!!!!

    or do the FSA only do that to IFA's

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  • @PeterHerd

    Nop apparently not. Lord Turner said the FSA aren't clever enough or do not have the power to go after the bankers personally.

    However they of course DO have more than enough powers to hold IFAs personally accountable for their professional actions and fine & ban them with impunity.

    I've been saying for years someone or more than one banking gurus dreamed up how to scam the public and businesses using PPI. Why has NO ONE being made accountable by the regulator?

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  • Be careful what you wish for. Just because you do not like what banks have done do not confuse this with breaking regulations or breaking the criminal law. It is possible that there may a cause of action under civil or commercial law, but I see little activity in that area in this country.
    I do not see any actions for fraud, so people accusing bankers of such action could end up on the other side of a court case.
    One assumes that there is a legal base for the process of clawing back bonuses. If there is not then precedent is being set to interfere with employment contracts. If that becomes the case remember that bankers do not live under a separate legal system from other workers.
    Like most people I have no sympathy for bankers but I have no time for those who are looking for lynchings or operating outside the rule of law. If you really feel that angry find ways of legally or practically getting back at bankers, publish and accept universal adulation.

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  • I do have an issue as the press have also announced that lower level staff will also have their bonuses cut! So it is not just the rich bosses who are being hit in the pocket (if you can call it that!) but the back-office staff as well. Hardly fair!!

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