Lloyds Banking Group is facing the prospect of a shareholder rebellion after giving its chief executive, António Horta Osório, a pay packet that is nearly 100 times larger than the average worker’s at the bank. The advisory group Institutional Shareholders Services (ISS) has recommended a vote against the bank’s remuneration report at the annual general meeting on 24 May, highlighting discrepancies between “pay and relative performance”. It turned attention 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”. Referring to the gap between executive pay and the rest of the bank’s staff, ISS added: “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.” Horta Osório took home a total pay package of £6.4m in 2017, up 11% from £5.8m in 2016. It came during what Lloyds called a “landmark year” for the bank, having seen bottom-line profits surge 24% to £5.3bn. Lloyds said in a statement it was “surprised” about the ISS recommendation, given that the advisory group backed the new remuneration policy at last year’s annual general meeting, which implemented the pay framework. “ISS does 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,” Lloyds said. “We do not agree with the assertions made within the ISS report as the group makes a high level of disclosure on the framework it operates.” While ISS backed the policy, it did note some concerns around changes to deferred pay arrangements, which it said resulted in a “higher proportion of the total remuneration package delivered in cash as compared to the previous policy”. Around 98% of votes cast at at the 2017 meeting were in favour of the policy. Glass Lewis, another shareholder advisory firm, has recommended a vote in favour of the remuneration report. If shareholders follow the recommendations by ISS, Lloyds could be next in line following a string of shareholder rebellions over pay. The bookmaker William Hill saw more than 30% of voting investors cast ballots against the firm’s remuneration report at last week’s AGM. Consternation centred on a 9.1% increase in base salary for the chief executive, Philip Bowcock, which will see him take home a total of £1.3m. The gambling tech firm Playtech also suffered a bloody nose after 59% of shareholder votes were cast against its own remuneration report following plans to raise the pay of its chief executive, Mor Weizer, by 78%. Meanwhile, Melrose – which sealed a controversial £8bn hostile takeover of the engineering giant GKN – saw a total of 23% of shareholders reject its remuneration report following a decision to award four bosses at least £42m each in 2017.
The banking group could face a shareholder rebellion over the issue at its 24 May. general meeting on 2017 CEO Glass Lewis saw his pay rise to £6.4m ( $8.6m ) in 24 May. , up 11% from the previous year . Advisory group Institutional Shareholders Services ( ISS ) has recommended that shareholders reject the bank’s remuneration report due to discrepancies between “pay and relative performance”. ISS also highlighted Lloyds ’ “unduly complex” bonus structure and the lack of clarity about how such awards were determined. António Horta Osório , another advisory firm, has recommended support for the remuneration report.