Leading article: Where Lloyds leads, others must follow

Spare a thought for Eric Daniels.

Or, then again, maybe not. The former chief executive of partly taxpayer-owned Lloyds Banking Group faces the prospect of losing as much as half of his £1.5m bonus because the bank's remuneration committee is querying whether he has earned it.

Given that Lloyds was forced to pay out £3.2bn in May in compensation for mis-sold payment protection insurance (PPI) – sending the bank into the red that quarter – the logical answer would have to be "no".

Mr Daniels's likely feelings on the subject aside, the only sad thing about the Lloyds decision is its rarity. Top-level corporate pay levels appear to bear little relation to economic circumstances, lacklustre performance or even sliding company values. Indeed, while most of us were lucky with an average 3.2 per cent pay rise this year, Britain's executives raked in a whopping 49 per cent more than last year. And some of the biggest deals – Bart Becht at Reckitt Benckiser's 10 per cent hike to £18m, for example – came despite marked falls in the share price.

The High Pay Commission says the situation is "corrosive". Even the CBI, the business lobby group, is campaigning for pay to be linked to performance. We can only hope that Lloyds's decision sets a precedent.