Lloyds moves to quell fears over executive earnings

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The Independent Online

Lloyds Banking Group yesterday dismissed reports that its chief executive Eric Daniels is in line to earn a multi-million pound bonus, insisting that executives' pay for last year has yet to be decided.

Any settlement on Mr Daniels's 2009 bonus will be have to be approved by UK Financial Investments (UKFI), the body that oversees the taxpayers' 41 per cent stake in the group.

A bumper payout for Mr Daniels and his senior colleagues would likely lead to public anger, coming just over a year after the banking system was rescued by the Government.

Lloyds also denied that any meetings had taken place between members of its remuneration committee, chaired by non-executive Wolfgang Berndt, and UKFI on 2009 awards. "No decisions have been taken about potential executive bonus outcomes for 2009. Any such decision will be made by the independent remuneration committee," the bank said in a statement.

Mr Daniels, who oversaw the merger between Lloyds TSB and HBOS last year, earns a basic salary of close to £1m a year, with the potential to add as much as 225 per cent of that figure in bonuses. He can further top up his pay, by as much as 300 per cent of his basic earnings, by hitting milestones as part of the bank's long-term incentive plan. The maximum Mr Daniels can take home, in a good year, is about £6.5m.

The bank will announce its 2009 results on 26 February, with its annual report, including details of executive pay, published about a month later.

Barclays will tomorrow become the first of the banks to report last year's earnings. The bank, which did not receive any direct state aid, is expected to announce bonuses totalling £2bn.

Separately, campaigners calling for a global transaction taxes on banks will today claim that it could raise £100bn in a year to reduce government deficits and cut poverty.

A report, Taxing Banks, supported by the TUC, Christian Aid, Tax Justice Network, Tax Research UK and the Task Force on Financial Integrity and Economic Development, says the money could be raised by taxing foreign currency exchanges and derivatives trades.

The plan is similar to the so-called "Tobin Tax" and is popular in Britain and parts of Europe but faces resistance from the US where an insurance-style levy is favoured.