Lloyds Faces Shareholder Grilling Over Banker Bonuses

Lloyds Banking Group will have to defend its push to pay bankers bonuses worth 200% of their salaries at the group's AGM in Edinburgh today.

The banking group, which is 25% owned by the government, is also likely to face questions over CEO Antonio Horta-Osorio's £7.8m (€9.5m, $13.1m) pay package at the AGM, as its main stock owners vote on remuneration proposals.

Lloyds requires permission from the government before it can start paying shareholders a dividend or changing remuneration details.

In February, Lloyds aimed to boost the pay of 400 of its senior staff despite the firm still facing a raft of mis-selling scandals, fines, and IT glitches.

However, the group has already boosted its annual banker bonus pool by 10% to £395m in 2013 after more than doubling its underlying profit to £6.2bn.

It then unveiled a 22% jump in first-quarter pre-tax profit and said it returned £4.2bn to the UK taxpayer during the first three months of this year.

Lloyds said in its first quarter interim management statement that it will also apply to the government to start resuming dividend payments to shareholders.

Subsequently, the Treasury said in a statement that it will support Lloyds setting a bonus cap at a maximum of 2:1, although it snubbed the Royal Bank of Scotland's (RBS's) similar bid for the same pay ratio.

'We made good progress in the first quarter benefiting from our simple, low risk, UK focused retail and commercial banking business model," said Horta-Osorio at the time.

"We provided further support to the UK economic recovery while delivering better underlying profitability and improved returns for shareholders from a stronger balance sheet."