Britain’s state-rescued Lloyds Banking Group said Friday that its boss Antonio Horta-Osorio, who returned to work this week after a two-month break due to fatigue, has declined his 2011 annual bonus.
“As chief executive, I believe my bonus entitlement should reflect the performance of the group but also the tough financial circumstances that many people are facing,” Horta-Osorio said in a group statement.
“I also acknowledge that my leave of absence has had an impact both inside and outside the bank including for shareholders. On that basis, I have decided to request that the board does not consider me for a 2011 bonus.”
Horta-Osorio became chief executive of the bank in March last year and has since announced a massive cost-cutting drive and thousands of job cuts.
His announcement on Friday comes soon after British Prime Minister David Cameron pledged to crack down on sky-high pay in the financial sector, which could include a binding vote for shareholders on executives’ salaries.
Portuguese national Horta-Osorio, 47, has declined to take his potential annual bonus of about £2.4 million ($3.7 million, 2.9 million euros) which would have been paid in March.
The bank boss returned to work on Monday after temporarily standing down in November because of serious sleeping problems.
Lloyds saw its shares slump when he took leave, amid fears that the move could be permanent and damage the progress made on reviving the troubled group.
“Under Antonio’s leadership, the bank made significant progress last year in its transformation against a very difficult economic backdrop,” said LBG Chairman Sir Winfried Bischoff in Friday’s statement.
“However, given the economic circumstances, the financial challenges that many people are facing and his recent leave of absence, Antonio felt it appropriate not to be considered for any award he might receive under the group’s annual bonus scheme for 2011. The board has accepted Antonio’s request.”
His total pay package for the year still stands at an estimated potential maximum of just over £10 million, which includes a basic annual salary of £1.061 million.
However, £9.0 million of this package is payable in shares in three years’ time and is subject to share price fluctuations, performance targets and agreement by the bank’s remuneration committee.
LBG, which is 40.2 percent state-owned after a huge bailout at the height of the global financial crisis, has slashed more than 40,000 posts since 2009 as it looks to nurse its way back to health after its part-nationalisation.
“I joined Lloyds Banking Group to rebuild the pride in the bank,” Horta-Osorio added on Friday.
“As a group, we have a significant impact for over 30 million businesses and households and therefore I believe we can make a real positive contribution to the economic and social well-being of the UK.
“My goal remains to restore the bank to profitability enabling us to support the country’s economic recovery sustainably and giving taxpayers the opportunity to get back their money.”
The lender, which was sunk by the global financial crisis and Lloyds TSB’s ill-fated 2008 takeover of rival bank HBOS, subsequently received a huge bailout from the British government.
Horta-Osorio was formerly head of Santander UK, the British wing of the Spanish bank. His predecessor, Eric Daniels, left LBG amid shareholder anger after he oversaw the government-brokered takeover of HBOS.
Source – AFP
