Some shareholders who intend to go to the Lloyds TSB annual meeting on 15 April plan to ask why the company's board are allowed to set their own pay instead of leaving the issue in the hands of a remuneration committee.
Feelings have been running high since it was revealed chief executive Peter Ellwood had been awarded a 1996 bonus of pounds 679,000, bringing his total remuneration package to pounds 1.2m. While the Greenbury report suggested a remuneration committee should be the final arbiter of pay, at Lloyds TSB it is the board which takes a final decision after advice from a pay committee.
Last night Sir Richard insisted his Greenbury report offered only recommendations that should not be taken as hard and fast rules to be implemented whatever the situation.
He said: "What I wanted [with the Greenbury report] was to ensure there was an adequate level of discussion so that shareholders had transparency and could question those who set executive pay levels."
Sir Richard believed that the practice at Lloyds TSB worked well. He thought it unlikely there would be any complaints from large shareholders.
But this failed to pacify some of the company's smaller investors.
Michael Napier, one shareholder whose proxy will raise the issue next week said: "I think it is absolutely disgraceful. Sir Richard is a member of the board and yet he has not done anything to bring Lloyds TSB pay practices in line with his own report and stock market recommendations." The UK Shareholders Association also expressed concern.
But a spokeswoman for the bank said it was much more democratic for the full board of 16 non-executive directors to take the ultimate decision on pay.