In the glossy video accompanying the bank’s new strategy, which we will discuss in more detail in a separate Newsletter, Charlie Nunn, Group Chief Executive, was asked what was “the toughest question you’ve been asked so far in preparing for this announcement?”. He said: “Probably the hardest one has been around the cost-of-living and the impacts we see for our customers”. What about the cost-of-living crisis for Lloyds staff? He doesn’t mention Lloyds staff once when discussing the cost-of-living crisis.

The bank has increased the minimum pay award to £1000 from £500. The bank says that: “It equates to an average award increase of over 4% for those at grades A and B, and 3.6% for those at grade C. It means that 30,000 will benefit from the revised pay increase”. However, RPI inflation, which is the measure of inflation used by unions when negotiating pay deals, is currently running at 7.8% and is set to rise again before pay increases become effective in April. That inflation squeeze and the accompanying tax increases mean that every Lloyds member of staff is going to be significantly worse off over the next 12 months. Lloyds is awash with money and could easily have used some of its excess capital to increase the size of the pay budget, but chose not to do so. That’s how much Charlie Nunn values staff.

What Bumper Bonus Year?

Staff had been led to believe that 2022 was going to be a bumper bonus year, but many staff are pointing to the fact that the bonus pool is not much more than it was in 2019, even though the bank’s underlying profit has doubled since then.

The Remuneration Committee (RC) said: “To ensure consistency, the Committee felt that it was important to operate the same framework for determining Group Performance Awards in 2021 as it did in 2020, including applying a profit threshold”. The implication being that if the Committee had decided to choose a different framework, Lloyds staff may have got significantly more of the profits they created.

And this is the same Committee which acknowledged that its decision last year not to pay bonuses had “a significant impact on the motivation of our workforce and the retention of talent through 2021”. However, they also said that whilst engagement scores had fallen “we have seen an increase in overall mood”. How they’d measured the ‘mood’ of Lloyds staff is not explained.

And yet again Lloyds staff are suffering because of the HBOS Reading fraud scandal with one of the worst bonus modifiers (a pseudo-scientific term for an arbitrary bonus reduction) – 0.92 – in recent years. However, the now disgraced and unemployed former Lloyds Group Chief Executive, Sir Antonio Horta-Osorio, was awarded a GPS award of £345,065, even though he had failed to resolve the Reading compensation problems now acting as a drag on the Bank’s reputation and share price.

The Remuneration Committee also said: “With respect to the provision taken for the independent review of compensation for customers of HBOS Reading, the RC is considering whether performance adjustments are appropriate for a number of individuals. Pending such further consideration, variable remuneration awards for 2022 will be frozen for former Executive Directors”. If the Dobbs review which is looking into the HBOS Reading fraud scandal determines that former Executive Directors didn’t properly investigate what was going on and didn’t report it to the regulatory authorities, all their shareholdings in LBG should be forfeited.

GMP – Update

The union has been contacted by thousands of Lloyds members who may be entitled to have their transfer payments, which they will have received when they transferred out of one of the Lloyds Banking Group Defined Benefit Pension Schemes, recalculated because of the Union’s High Court victory. Many of those members may be entitled to top-up payments which could be worth up to £25k, depending on circumstances. Hundreds of TSB staff have also registered their interest in the union’s campaign.

A copy of the letter we sent to Harry Baines, Chairman of Lloyds Banking Group Trustee Limited, enclosing the details of those members who have registered to have the transfer payments recalculated, can be found here.

We will keep members informed of developments.

Members with any questions should contact the Union’s Advice Team on 01234 262868 (choose Option 1).

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