Lloyds Banking Group has suffered its first significant shareholder rebellion since fully exiting state ownership last year, after more than a fifth of investors refused to back its remuneration report.
Almost 21% of Lloyds investors voted against the bank’s executive pay report for 2017, which was seen as a landmark year for the company after it ended almost a decade of taxpayer ownership.
The former bailed-out bank becomes the latest major British company to suffer a pay revolt from investors over recent weeks. More than 20 listed firms, including the pharmaceutical company AstraZeneca and the oil company Shell, have now been rocked by pay rebellions.
Alongside RBS and Northern Rock, Lloyds was one of the biggest casualties of the financial crisis, requiring more than £20bn of money from taxpayers to stay afloat. The government sold the last of its remaining stake in Lloyds in May last year.
The Lloyds chief executive, António Horta Osório,saw his earnings rise 10.9% from £5.78m in 2016 to £6.42m in 2017 – nearly 100 times the average worker’s pay at the bank.
The advisory group Institutional Shareholder Services had recommended a vote against the bank’s remuneration report at the annual general meeting, which took place in Edinburgh on Thursday, highlighting discrepancies between “pay and relative performance”. Despite the protest, a majority of shareholders backed the pay report.
Responding to the vote, the bank’s chair Norman Blackwell, told the annual meeting: “The vote has been carried, however as I said we are disappointed that a number of shareholders did not support the resolution this year and we will of course note and respond to them.”
The TV presenter Noel Edmonds was among the shareholders publicly berating the bank at the event , having bought one share for 67p in order to attend. The former Deal or No Deal host used the opportunity to criticise Lloyds’ treatment of small customers.
“If you want to turn it into ‘Jail or No Jail’ you are going in the right direction. Things are very serious but I keep asking questions and you keep ducking them,” he told the bank’s management. Edmonds is seeking financial redress from Lloyds after allegedly falling victim to fraud by former staff at HBOS Reading, which Lloyds bought at the height of the financial crisis.
Edmonds has been a vocal critic of Lloyds ever since the collapse of his company, Unique Group, which he alleged was “groomed, pillaged and destroyed” by the bank, leading to scores of job losses.
Six people, including two former HBOS bankers, were jailed last year for the fraud and the bank is still being investigated by the UK’s National Crime Agency. Lloyds has apologised to the victims of the HBOS Reading fraud and set aside £100m for compensation.
