Lloyds Banking Group is considering clawing back bonuses paid to executives that were linked to the sale of payment protection insurance, according to its chairman Win Bischoff.
Speaking at the bank’s annual general meeting in Glasgow last week, Bischoff said the bank is in discussions with the FSA over the move but no decision has been taken.
He said: “The implications on compensation are being considered by the remuneration committee and will be determined by the board in full course.”
Under revised FSA remuneration code rules, brought in on January 1, deferred compensation should only be paid in full if it is justified by subsequent performance.
However, clawbacks only affect deferred shares or cash awarded but not yet received and do not have an impact on compensation already paid.
If taken, the move will only affect deferred bonuses that are due to be paid out in the future.
Clayden Associates chartered financial planner Daniel Clayden says: “If Lloyds does this, people will see that these rules have some teeth. That could focus some minds to make sure practices are for the benefit of clients instead of sales figures.”
Lloyds was the first bank to break ranks with the British Bankers’ Association, after the BBA lost its judicial review over the FSA’s PPI complaint-handling measures.
Earlier this month, Lloyds said it would not support an appeal of the High Court decision and set aside a total of £3.2bn to pay compensation to claimants.