LONDON (Reuters) - Lloyds Banking Group LLOY.L investors rebelled against the lender's pay policy for top bosses on Thursday, with more than a third of balloted shareholders rejecting its bonus plan.
The significant opposition came after influential shareholder advisory group ISS recommended investors block Lloyds’ executive pay policy over concerns about a switch to more certain long-term bonuses.
The policy passed with 64% support from votes cast.
Like some other blue chip companies including BT, Lloyds is switching to a restricted share incentive scheme for top bosses.
Under the proposals, CEO Antonio Horta-Osorio can earn a maximum annual overall pay package of 6.3 million pounds, down from 8.3 million pounds previously, ISS calculated.
But ISS questioned whether the discount was sufficient given the higher probability of receiving the bonuses.
Lloyds said it would consult investors further after some had expressed reservations, including that it should be simplified, but said it would implement the new policy.
The bank has previously said the discount is in line with industry standards and the bonuses are still subject to tests.
Since last year’s investor meeting Lloyds has cut pension allowances for top bosses and raised contributions for all staff after stinging criticism from politicians.
Horta-Osorio and other executives have waived their bonuses for this year due to the coronavirus crisis.
In a statement earlier during the webcast investor meeting, Horta-Osorio said supporting customers hit financially by the coronavirus pandemic was the “right thing to do”, but this would come at a financial cost to the bank.
Lloyds faced criticism for a slow start in providing emergency loans to companies left out of pocket following a near-shutdown of the UK economy since late March, but has stepped up its support in recent weeks.
It has provided nearly 5 billion pounds of state-backed finance through the government’s various relief schemes, as well as one million repayment holidays for individual customers, the bank said.
The bank’s first quarter profit was all but erased after it set aside 1.4 billion pounds for likely bad loans.
Reporting by Iain Withers, editing by Sinead Cruise and Susan Fenton
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