Ms Harriett Baldwin MP, Chair of the Treasury Select Committee, recently wrote to Mr Charlie Nunn, Lloyds Banking Group Chief Executive, regarding how his pay and bonus package was linked to the performance of the Group. The clear implication of her letter was that Lloyds’, like the other banks’, profits had risen because of interest rates increases and not because anything Mr Nunn or his executive team had done. In those circumstances, why should he get any increases in either pay or bonuses?
We believe that Ms Baldwin also wrote to the Chief Executives of HSBC, Barclay, NatWest asking the same questions.
A copy of that letter can be found here. In its response to Ms Baldwin’s letter, the union said:
“It is important in the context of your investigation that you understand how Mr. Nunn’s remuneration compares to the majority of staff in Lloyds Banking Group. As you said in your letter, Mr. Nunn’s total remuneration was £3.8 million in 2022. It was made up of a combination of fixed and variable pay as follows:
Group Performance Share Award
Mr. Nunn received a Group Performance Share Award of £1,338,000 which was a 47% increase on 2021. The average increase for all Lloyds employees over that same period was 12%. To put that in perspective, those staff in the lowest three grades, which is approximately 40,000 staff, will get a bonus award of 5% of base salary. Mr. Nunn’s award was worth 118% of his base salary.
Fixed Share Award – £1,050,000
As part of his total remuneration, Mr. Nunn received a fixed share award, which was paid out in three tranches throughout the year, that was worth £1,050,000. The fixed share award element of Mr. Nunn’s total remuneration pay is not subject to any performance conditions at all. In fact, Mr. Nunn gets that award for simply turning up to work.
Of the 59,354 employees of Lloyds Banking Group only a handful of senior executives get similar share awards.
We believe that other banks make similar share awards to their senior executives.
Pension Allowance – £170,000
In respect of Mr. Nunn’s pension allowance of £170,000, which is worth 15% of his base pay, I refer you to a letter I’ve sent to Mr. Chris Cummings, Chief Executive of the Investment Association [letter can be found here]. The lowest graded employees of Lloyds Banking Group must make an employee contribution of 6% of base pay to get an employer contribution of 15%. Senior Executives are required only to make an employee contribution of 3% to get the same employer contribution of 15%.
Mr. Nunn is not required to make any such contribution to get his 15% pension allowance”.
Members with any questions on this Newsletter should contact the Union’s Advice Team on 01234 262868 (choose Option 1).
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