Lloyds Banking Group chief executive Charlie Nunn could receive a maximum annual pay package worth more than £13 million, as the bank prepares to take advantage of post-Brexit rules that lifted the cap on banker bonuses. The bank's remuneration committee is drafting a new three-year executive pay policy that, for the first time, will allow for significantly higher performance-related pay.
If Lloyds follows rivals and proposes a 45% increase in maximum pay, Nunn would be in line for a potential package of up to £13.2 million, up from the current £9.1 million. The proposal would be put to a shareholder vote at the annual general meeting this spring. Like other banks, Lloyds has hinted that the new policy would include a 'significantly reduced' fixed salary for Nunn, offset by a higher variable reward opportunity.
The move comes after Barclays, HSBC and NatWest shareholders approved big pay rises for their chief executives last year. Barclays CEO CS Venkatakrishnan received a 45% rise to a maximum of £14.3 million, HSBC's Georges Elhedery a 43% increase to around £15 million, and NatWest's Paul Thwaite a 43% rise to £7.7 million. The bonus cap, introduced in 2014 to curb risky behaviour after the financial crisis, was scrapped in 2023 under post-Brexit rules.
Critics argue that higher pay could encourage excessive risk-taking, but supporters say it is necessary to attract top talent and compete with US banks, where pay packets are significantly larger. However, some large asset managers have warned against simply matching rivals' pay rises, which may give Lloyds shareholders pause. A Lloyds spokesperson said the new policy would 'reflect market developments and regulatory changes' and 'reinforce the connection between performance and reward'.
