Lloyds’ executives who are set to have their pensions brought in line with the rest of the workforce are likely to make remuneration gains elsewhere, a leading banking union has warned.

Giving evidence in front of the Work and Pensions Committee today, 24 July, Accord general secretary, Ged Nichols, said he “wouldn’t be surprised” if this was the case, but said that the workforce would be generally supportive of the move.

It follows the news that despite the bank’s current chief executive António Horta-Osório’s pension being cut from 46 per cent to 33 per cent, equivalent to £167,000 annually, his overall package for the year increased by £19,000 to £2,895,288.

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

Nichols said: “[Executive pensions] should be reflective and the recommendations of the Investment Association would be supported by the majority of the workforce, there are not many employees who think their executives are under rewarded, but when you add into that long-term incentives and pension arrangements, people do generally take a dim view of it.

“We support that and I think Lloyds Banking Group will deliver on that in time. Now whether they just review the make-up of the executive award and what they lose in pensions they’ll gain somewhere else, I wouldn’t be surprised, but generally I think the workforce would be more supportive.”

Last month, committee chair Frank Field accused Lloyds Banking Group chair of the remuneration committee, Stuart Sinclair, of being slow to align the remuneration policy of the firm to its wider workforce.

Sinclair defend the company’s remuneration policy by stating that the firm is early in its current three-year remuneration cycle and added that the workforce was generally happy with the executive’s remuneration package.

However, Nichols disagreed, adding: “I was rather surprised by that comment, I don’t know what the evidential base of the statement was, it certainly is not the view reflected by union members across the piece, the chief executive is not an unpopular chief executive … but whether people equate that to being worth his weight in gold is another matter.”

Furthermore, he noted that the workforce had more immediate concerns over their job security, with executives’ remuneration packages not one of their major concerns.

“They have more immediate concerns over their job security, so it isn’t something that exercises union members a lot,” he said.

Share Story: