After provisioning a massive £3.2bn for compensation against mis-sold PPI Claims from its customers – Lloyds Banking Group is now considering reclaiming some of this debt back by clawing back the bonuses awarded to executives.
The chairman of Lloyds, Win Bischoff advised at the annual shareholders meeting that they were examining whether the cost of PPI claims should affect the pay of those responsible. A large percentage of the shareholders at Lloyds are mounting pressure for the firm to cancel future bonus payments to its former chief Eric Daniels. Daniels stepped down in February of this year, just before the bank took the action to provision £3.2bn in funds. According to Lloyd’s annual report, they have the power to recoup unwarranted bonuses and cancel future payments if projected profits turn out to be illusory.
The Financial Services Authority (FSA) introduced clawback rules last year, but it is believed that no bank has reclaimed any bonuses since the rules were introduced.