Lloyds Banking Group suffered an embarrassing shareholder revolt over boardroom pay at its heated annual general meeting yesterday.
Almost one in five votes cast failed to support the bank's remuneration report. The plan included a £2.57m final payday for Eric Daniels, the former chief executive, and a massive signing on deal for his replacement, Antonio Horta-Osorio.
At the meeting, the board faced repeated attacks over pay from individual shareholders angry about the bank's financial performance, ailing share price and cancelled dividends.
They also grilled the bank's bosses on its disastrous takeover of HBOS and the shock £3.2bn charge announced for mis-selling payment protection insurance (PPI).
Sir Win Bischoff, the bank's chairman, was forced to say sorry for the bank's handling of PPI. "I have apologised for that and other [bank] chairmen may do the same," he said.
Under pressure from shareholders, Sir Win also vowed to fight the call from the Independent Commission on Banking for Lloyds to sell off more branches. He said the bank had an agreement with the Government and European Union for 600 branch sales and "we firmly believe that shouldn't be altered".
The bank said 8.2 per cent of votes went against the remuneration report but, including abstentions, 18 per cent of voting shareholders refused to support it. UK Financial Investments, which manages the Government's 41 per cent stake in Lloyds, voted in favour.
The Association of British Insurers had given the report an "amber-top" alert before the meeting and the shareholder consultancy Pirc had urged investors to vote against.
The board was booed over pay at times during the fractious two-and-a-half hour meeting in Glasgow.
Martin Simons, from London, said to applause: "The banking community is living in cloud cuckoo land. I think it is a blessed scandal."
David Harrison from Birmingham added: "Looking at the remuneration report, I thought when I read it that the 300 per cent bonus was a typo. Why on earth is a bonus 300 per cent when 30 per cent would be exotic in most people's opinion?"
Tony Lloyd, who chairs Lloyds' remuneration committee, replied: "We operate in a banking industry in which bonuses, for better or worse, are larger than 30 per cent.
Mr Horta-Osorio was given a £13.5m package to lure him from Santander to replace Mr Daniels, including £4.5m in shares for his first year. Later he will be eligible for a bonus of 2.25 times his £1.06m salary and up to 300 per cent of his £1.2m "reference salary" in long-term shares.
The Rev Dennis Nadin, from Essex, attacked the "gross overpayment" of bankers after the share price had collapsed, the dividend was axed and bankers' actions hit the poor.
"Bonuses of up to 300 per cent for doing the job satisfactorily, or unsatisfactorily – this system simply encourages greed," he said.
In a heated exchange with Sir Win, Mr Nadin asked why the bank could not find "men of probity" who would work hard without huge bonuses, pay-offs and signing-on deals.
Sir Win said Lloyds had many honest workers and that "there are men of probity who are paid bonuses".