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The Board of Lloyds Banking Group announces that it will make an adjustment to a proportion of the bonus awards in respect of 2010 for a number of its senior employees, including five Executive Directors. This adjustment will be implemented by reducing the amounts awarded in Deferred Shares and will amount to 40 per cent of the award in respect of its former Chief Executive, 25 per cent of the awards in respect of four other Directors and 5 per cent of the awards in respect of all members of the Group Executive Committee and others. The total number of people so affected is 13.
The Board’s decision is based on the fact that had the outcome of the Judicial Review into Payment Protection Insurance (PPI) in April 2011 been known, and had the consequential provision made been effected at the time of the award of the 2010 bonus in February 2011, the bonus pool would have been lower and individual bonus awards would also have been lower.
The bonus pool for 2011 will reflect a further reduction in respect of the above mentioned provision, which will affect all individuals eligible to be considered for a discretionary bonus for that year.
The Board wishes to emphasise that its decision is based entirely on the principle of “accountability” and in no way on culpability or wrong-doing by the individuals concerned.
The FSA has been kept informed throughout the deliberations leading up to the decision.
