Lloyds Bank in Parliament for questions on executive pension levels

18 June 2019

Work and Pensions Committee question Lloyds Bank Group Chief Executive António Horta-Osório, and head of the Group’s Remuneration Committee Stuart Sinclair, on the level of executive pensions at the Group compared to that of the wider workforce.

Purpose of the session

The position at Lloyds will be set against that at HSBC – represented on the witness panel by HSBC RemCo Chair Pauline van der Meer Mohr, and Group Head of Performance Management Alex Lowen  – where the nominal contractual “impediment” to equalising pension contribution rates for executives and the wider workforce has been simply circumvented by the HSBC CEO voluntarily giving his up.

On 2 May the Committees wrote to Lloyds remuneration committee asking why Lloyds chief executive “Mr Horta-Osório’s pension contribution rate stands at 33%, when the maximum employer contribution rate stands at 13% for other Lloyds employees – and the contribution rate for Lloyds’ Chief Operating and Financial Officers stands at 25% of salary.”

The Committees also questioned whether Mr Horta-Osório’s fixed share award increase, to £1.05 million, is “in the spirit of the Investment Association’s guidelines”. The chief executive’s total pay package is worth £6.27million a year.

Chair's comments

Commenting on Lloyds’ response at the time of the Group’s Annual General Meeting a few weeks ago, when executive pay packages were being put to Lloyds’ shareholders for approval and it was reported the bank had distributed a video trying to encourage staff to vote,  Committee Chair Frank Field said:

“Trying to twist the arms of thousands of hard-working staff  - who helped generate £6bn profit last year alone -  to wave through executive pension levels twice their own smacks of feverish desperation and boundless greed. The bank’s remuneration committee churning out a litany of excuses only further erodes what little dignity is left in these proceedings. Senior executives at Lloyds could bring this sorry episode to an end, today: just give it up.”

Investment Association Response

As the Investment Association set out in response to the Committee at that time, the UK Corporate Governance Code of states that

“pension contribution rates should be aligned to those of the workforce … Investors expect new executive directors to be appointed on this level of pension contribution. The contribution rate for incumbent executive directors should be reduced over time to the contribution rate available to the majority of the workforce …”

It goes on to describe “one likely impediment to companies achieving swift” compliance with IA guidelines is a contractual obligation regarding pensions: but goes on immediately to describe how this “impediment”  is simply and easily circumvented by a director voluntarily giving up contributions, “as demonstrated by HSBC.”


Wednesday 19 June 2019, The Wilson Room, Portcullis House

From 09.30am

  • António Horta-Osório, Group Chief Executive, Lloyds Banking Group plc
  • Stuart Sinclair, Independent Director and Chair of the Remuneration Committee, HSBC
  • Pauline van der Meer Mohr, Chairman of Remuneration Committee, HSBC
  • Alex Lowen, Group General Manager and Head of Group Performance, HSBC

Further information


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