Investors in taxpayer-backed Lloyds Banking Group today protested over executive pay plans at the firm's annual general meeting.
More than 8.5% of votes were cast against approving the directors' remuneration report for the year to the end of December 2009.
The vote came amid criticism of the group's pay policies for top bosses and followed calls for shareholders to vote down its remuneration plans.
Chief executive Eric Daniels waived his bonus for 2009, but the bank's remuneration committee has been criticised for making the award after Lloyds slumped into the red last year by a mammoth £6.3 billion.
The decision has also been widely blamed for the unexpected announcement in March that the chair of the remuneration committee Wolfgang Berndt was to retire at today's shareholder meeting.
Chairman Sir Win Bischoff told investors at the gathering in Edinburgh that the group had to "strike a balance" in making pay decisions for key executives.
He said: "The board, on the recommendation of the remuneration committee, believed that he (Eric Daniels) merited a bonus because of his significant personal contribution and the group's overall performance, albeit loss-making, in 2009."
In relation to wider incentive payments across the group, he said it was "right they receive appropriate financial recognition when stretching financial targets are met".
His address to shareholders came in the week after it was revealed that Lloyds, which is 41% owned by the state, is back in profit and expects to stay in the black for the rest of the year.
But there has been stiff opposition to the remuneration plans from shareholder group Pirc, which advised institutional investors to reject the Lloyds pay proposals it believes are potentially "excessive".
There has also been concern over performance measures in the long-term incentive awards and the inclusion of a share price target, especially given recent gains for Lloyds stock that have taken shares close to the trigger level at which rewards start to kick in.
But UK Financial Investments (UKFI) - the body charged with managing Government-owned banking assets - today confirmed its support for Lloyds.
The AGM fell on the same day as voters go to the polls in the UK General Election.
It drew criticism from one shareholder at the meeting, who suggested the clash of dates inconvenienced those who would like to be working in their constituencies to help their parties.
Board members were grilled by shareholders on a number of issues, including performance targets, the location of branches and returns for investors.
The topic of pay and bonuses for bosses at the part-nationalised bank drew comments from a number of speakers at the meeting, which was attended by several hundred people.
Alexander Hopkinson-Woolley, of the Isle of Wight, was applauded when he said: "Many shareholders in Lloyds bank have lost much of the capital value of their investments and have been deprived of any dividend income, while the directors of the bank have continued to receive very good salaries and, in some cases, increased bonuses.
"I do not accept the story that because of superior performance it is necessary to pay very large amounts to particular directors on the grounds that they may go somewhere else.
"If someone's loyalty is so weak ... they should not be in that institution, because institutions depend on loyalty."
Shareholder David Harrison, from Birmingham, called for a cap on bonuses and salary hikes.
He said: "The whole system of bonuses is rotten. Can we please cap all those bonuses, and cap the salary rises?"
Suggesting the cap should be no higher than 2%, he told the board: "If you did all that, you might be able to pay back some of the Government money and give us our dividends earlier."
It was also Mr Harrison who asked that the AGMs be moved in future from the first Thursday in May.
"Some of us, although we can have a postal vote, would like to be working for our parties in our constituencies," he said.
London-based Martin Simons criticised bosses' remuneration at a time when depositors were being hit.
He said: "To think that we're generating profits and bonuses, whilst you are rewarding depositors with 0.1%, which is taxable and which doesn't take account of inflation. That is absurd. Why bother with 0.1%?"
Shareholder Mary Craig, of Glasgow, raised questions over Mr Daniels' planned pay deal, which could see him reap a potential £6.2 million in salary and share options for 2010.
Ms Craig said: "How can Lloyds Banking Group justify Mr Daniels' £6.2 million proposed pay deal?"
Sir Win Bischoff touched on the concerns in his opening speech, in which he told shareholders: "We recognise that the reward in the banking industry remains a sensitive issue for our shareholders and for society in general.
"We also appreciate that this is a difficult time for many businesses and households across the UK.
"We understand the financial hardships that they have been experiencing in this challenging environment over the past year.
"The remuneration committee has sought to strike a balance between the fact that the group has been loss making and the need to reward key executives to run the business to maximise the returns for you, our shareholders, including the taxpayer."
The banking group later said it was pleased with the shareholder support received for the remuneration report.
A spokeswoman said: "More than 90% of our shareholders have today voted in favour of the directors' remuneration report. We are pleased with the shareholder support we have received.
"We have a remuneration policy in place designed to drive the creation of shareholder value. In developing that policy, we have had extensive dialogue with shareholders and industry bodies, during many meetings, and we have worked collaboratively with them to address their feedback."Reuse content