On the go: In a letter to Lloyds Banking Group, the chairs of two parliamentary select committees have questioned pension and share awards at the bank, following reports that chief executive António Horta-Osório has “voluntarily” given up a portion of his pension.
Frank Field, chair of the Work and Pensions Committee, and Rachel Reeves, chair of the Business Energy and Industrial Strategy Committee, have asked the chair of Lloyds’ Remuneration Committee why Mr Horta-Osório’s pension contribution rate stands at 33 per cent, when the maximum employer contribution rate stands at 13 per cent for other Lloyds employees. The contribution rate for Lloyds chief operating and financial officers stands at 25 per cent of salary.
The committees also question whether Mr Horta-Osório’s fixed share award increase, to £1.05m, is “in the spirit of the Investment Association’s guidelines”.
In a separate letter, Mr Field and Ms Reeves also wrote to the association with questions on the corporate response to its initiative highlighting companies that pay pension contributions to executive directors at rates above the majority of the workforce.
They have also raised the question on whether restrictions on executive pension contributions should be put in law rather than merely Investment Association guidelines.
In March, the BEIS committee published a report saying companies must do more to link top bosses’ pay to that of the rest of their workforce.
The report said that “huge differentials” in bosses’ pay are “baked into the pay system” and that a heavy reliance on “over-generous”, incentive-based executive pay, too often waved through by weak remuneration committees in the habit of designing ever more complicated pay packages, is at the root of excessive executive pay packages.
