Following the union’s long campaign to highlight the monstrous differences in pension allowances between Mr Antonio Horta-Osorio and his executive director colleagues, and the majority of staff, the Rt Hon. Frank Field MP, Chair of the Work and Pensions Committee and Ms Rachel Reeve, Chair of the Business Committee wrote to the Chairman of the Lloyds Remuneration Committee asking why “Mr. Horta-Osorio’s pension contribution rate stands at 33%, when the maximum employer contribution rate stands at 13% for other Lloyds employees – and the contribution rate for Lloyds’ Chief Operating and Financial Officers stands at 25% of salary.”
Today, Mr. Field has published the response from Stuart Sinclair, Chairman of the Group’s Remuneration Committee. In response to that “explanation” of executive pensions, Mr. Field has said:
“Trying to twist the arms of thousands of hard-working staff – who helped generate £6bn profit last year alone – to wave through executive pension levels twice their own smacks of feverish desperation and boundless greed. The bank’s remuneration committee churning out a litany of excuses only further erodes what little dignity is left in these proceedings. Senior executives at Lloyds could bring this sorry episode to an end, today: just give it up.”
Rachel Reeves MP, Chair of the Business, Energy and Industrial Strategy Committee said of Lloyds Banking Group’s pension arrangements for Mr. Horta-Osorio that:
“The pension for the Lloyds Chief Executive is only the latest example of a damaging narrative for UK business – there being one rule for the bosses, another for the workers. Rather than setting challenging long-term targets for CEOs, pay committees are prone to gaming the system, designing ever more complicated pay packages to handsomely reward their executives. Setting CEO pay becomes an expensive version of whack-a-mole where pay committees, for appearance-sake at least, hammer down on one element, such as base salary, only to allow other parts, such as pension entitlement, to pop up to reward their executives.
“The Investment Association are clear that pension contribution rates for senior staff should be aligned with those of their workforce. But too often investors are supine in the face of extravagant executive rewards. In this AGM season, investors at Lloyds and other companies should take the opportunity to hold pay committees to account and vote against remuneration reports which include CEO pay packages vastly outstripping those of the wider workforce.”
Regardless of whatever happens at the AGM tomorrow, this issue is not going to go away and we are not going to let it go. We will respond to Mr Sinclair’s letter in detail in the next few days. However, we would want to make one point now. Mr Sinclair says “In April 2019, Antonio asked that his defined benefit pension should also be capped to his pensionable salary in 2014 with no future increases”. One could be forgiven for thinking that was a selfless act on the part of Mr Horta-Osorio. It was no such thing. The union had highlighted that he was the only person in the bank getting a final salary pension, despite the fact that he’d introduced a pensions cap for everyone else in 2014, and that was picked up by the press. Only once he knew the game was up, did Mr Horta-Osorio offer to give up his final salary pension.
Members with any questions on this Newsletter can contact The Union’s Advice Team on 01234 262868. A copy of the letters sent to the Investment Association and the Rt. Hon Frank Field MP can be found on the union’s website.