Much of Lloyds Banking Group’s profits for 2019 are going to be wiped out by PPI compensation payments. Staff in LBG have been told to expect significantly lower bonus payments in February, with some suggestions that bonuses could be reduced by 25%.
How does that affect those staff who moved to Schroders Personal Wealth in June 2019? Lloyds said that bonus payments would be made up of 5/12 Lloyds Banking Group and 7/12 Schroders Personal Wealth. In June 2019, Lloyds Banking Group was posting a half-year statutory profit after tax of £2.2bn. Underlying profit was £4.2 bn. Since then things have gone pear shaped but should that affect the level of Lloyds’ bonuses paid to staff at Schroders? We think not. The bank can’t force staff to move and then penalise them afterwards. The bank also said that Schroders Wealth would have increased bonus funding and “will impact the levels available for managers to allocate at year end”. All staff in Schroders have been through significant changes over the last 6 months having helped build the new company. Staff are now having to juggle increased opportunities to build growth, whilst ensuring that their existing customers – who have assets of some £13bn – move seamlessly across to the new business.
Notwithstanding the problems of Lloyds Banking Group, we would expect ‘on target’ bonuses for all Schroders staff to be significantly more than last year. If not, then all the good work since the transfer will be for nothing.
Staff were offered more, if they delivered more, and they have every right to expect that performance to be reflected in bonuses.
We will write to members again in early February setting out how they can challenge their bonuses if they are not happy. We would advise Line Managers to make sure their bonus rationales are comprehensive because members will want to see them, especially if their bonus awards are less than ‘on-target’.
Members with any questions on this Newsletter can contact the Union’s Advice Team on 01234 262868.