James Moore: Lloyds' timing is handy – but why must it stop there?

Click to follow

So Lloyds Banking Group is getting tough with its executives. Those who presided over the bank when it was merrily misselling worthless payment protection insurance policies alongside personal loans are going to have to forgo (some of) their bonuses. The leaking of the board's ostensibly hardline approach (presumably after a certain amount of prodding from the regulators and the Government) means that Lloyds goes into its results smelling of roses. Handy, that, when you're planning to announce losses which could reach £4bn. The clawback means that the former chief executive Eric Daniels, together with a number of his boardroom buddies and one or two other senior bosses, will lose a combined £2m.

It isn't entirely clear how this was calculated. Bonuses are supposed to be based on a variety of performance targets. Did they come into play? Or did the Lloyds bosses simply get together, hear what the regulators were saying, and realise that if they came up with a big enough looking number they'd get a much-needed PR boost?

This is a bank, remember, whose chairman, Sir Win Bischoff, once lectured journalists about the need to get to a place where "rewards that shareholders have approved" could be paid to poor little executives.

Even then, although £2m looks like a big number, it doesn't amount to a hill of beans when compared with the £3.2bn that Lloyds has set aside to cover the cost of compensating those mis-sold PPI policies.

Lucky old Antonio Horta-Osorio. Before becoming the chief executive of Lloyds he was the boss of Banco Santander's UK arm. Lloyds ponied up a multimillion-pound package to compensate him for the shares he would have lost through leaving. Given that, it's hard to see how Santander might claw back any bonuses from him, assuming it wanted to. He had also already waived his 2011 bonus before Lloyds said the PPI scandal would see a reduction in the overall bonus pool for that year.

When all is said and done, though, PPI is small potatoes when you consider the biggest financial hit that certain of Lloyds executives (including Mr Daniels) have landed their shareholders with.

The decision to rescue HBOS has cost them nearly 10 times as much, their investments having been diluted through two multibillion-pound cash injections from the Government, one of which came as part of a massive rights issue.

We've yet to see any clawbacks coming from that little doozy.

Mr Daniels has always claimed that shareholders would eventually reap the benefits. When precisely? Some 630 branches are already having to be hived off as the price of the bailout.