Lloyds Banking Group (LON:LLOY) could potentially face a shareholder revolt over its chief executive’s pay package, the Guardian reports. The news comes ahead of the bailed-out lender’s annual general meeting (AGM) on Thursday.
Lloyds’ share price closed marginally lower in the previous session, shedding 0.30 percent to 66.03p. The shares underperformed the broader London market, with the benchmark FTSE 100 index ending the previous session 0.12 percent lower at 7,778.79. The bailed-out lender’s shares remain about eight percent down this year.
Investors urged to vote down pay report
The Guardian reported on Friday that advisory group Institutional Shareholders Services (ISS) had recommended a vote against Lloyds remuneration report at the upcoming AGM on May 24, highlighting discrepancies between ‘pay and relative performance’. The advisory body pointed to an ‘unduly complex’ bonus structure and said there was a “lack of clarity in the company’s public disclosures on how bonus outcomes are actually determined”.
“Although pay ratios have not been disclosed, ISS has calculated that the CEO’s pay is 95.0 times that of the average employee in the organisation,” ISS pointed out. Antonio Horta-Osorio took home a total pay package of £6.4 million for last year, up 11 percent from £5.8 million in 2016.
Lloyds disagrees with assertations
The newspaper meanwhile quoted Lloyds as commenting that ISS did not “challenge the quantum of the awards, which it states are aligned with the group’s strong performance, but raises concerns about the complexity of the framework”. The bailed-out lender, however, noted that it did not agree with the ISS assertations, noting that it made “a high level of disclosure on the framework it operates”.
The news comes as Lloyds inked a deal to offload its Irish residential mortgage portfolio to Barclays (LON:BARC) for about £4 billion in cash as part of its strategy of becoming a low risk, UK-focused bank.