The chief executive of Lloyds Banking Group has been summoned by the Work and Pensions Select Committee to discuss the bank’s approach to executive pensions.

Chief executive, Antonio Horta-Ososrio, and renumeration committee chair, Stuart Sinclair, have been invited to give oral evidence in front of the cross-party group of MPs “before the summer recess”.

It follows a letter from Sinclair to committee Chair Frank Field, and Business Energy and Industrial Strategy Committee chair, Rachel Reeves, dated 9 May, in which he defended the group’s policy regarding executive pension pay after it cut Horta-Osório’s contribution rate from 46 per cent to 33 per cent.

Sinclair said that it had made the change in light of the recommendations from the Investment Association (IA) on executive pay.

The chairs of the two government select committees wrote to Lloyds Banking Group earlier in the month, seeking an explanation for the pension contribution rates, which limits other employees to a contribution rate of 13 per cent.

Two other Lloyds executive directors are rewarded with contribution rates of 25 per cent, however, Sinclair added that no changes have been proposed regarding their contributions.

In February, the IA said it will target companies paying newly-appointed directors pension contributions at rates above the majority of their workforce.

It added that it will use its Institutional Voting Information Service, which provides corporate governance research to shareholders to aid their voting decisions, to 'red-top' the companies paying unfair pension contribution rates.

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