New Lloyds boss may land £5.5m pay day

Lloyds Banking Group's new boss Charlie Nunn could be awarded £5.5m in annual pay and bonuses if he hits his targets.

Mr Nunn has been announced as the new replacement for Antonio Horta-Osorio, who leaves the bank in the summer.

He will be paid about a fifth less than the outgoing boss.

The £5.5m figure is the maximum he could receive in annual pay. The sum includes a £1.13m salary, a fixed bonus of £1.05m and longer-term bonuses and pension payments.

Top banker salaries in the UK have been dropping in recent years amid sluggish share price performance, low profitability and shareholder unease.

Mr Nunn will also be bought out of various bonuses he was expected to be paid at HSBC, where he led the bank's High Street banking division. The bank didn't disclose an amount.

Mr Horta-Osorio was paid £4.73m last year - down on the £6.54m a year earlier.

Mr Nunn's maximum £5.5m payout compares with a potential £4.26m award for NatWest boss Alison Rose, £8.3m for Jes Staley at Barclays and £9.9m for HSBC chief Noel Quinn.

In each case, the total is based on demanding targets, and the final payout is likely to be lower.

Insiders at Barclays and HSBC insist that their companies are more complex businesses, taking in investment banking and operations abroad.

But such large payouts still attract criticism.

"Changes in key staff are an absolutely critical test of whether banks are serious about changing the culture of vast internal pay gaps between a handful of senior bankers at the top and the branch staff, cleaners, caterers, security workers and administrators who ensure the organisation can function," said Luke Hildyard, executive director of the High Pay Centre think tank.

"This is a real failure of that test. It really shouldn't require a £6m pay package to attract someone to the job."

A start date has yet to be agreed with HSBC, which could mean finance chief William Chalmers has to lead the bank after Mr Horta-Osorio leaves and before Mr Nunn arrives.

Last month, Lloyds asked staff currently working from home as a result of the coronavirus pandemic to continue doing so until at least next spring.

The group said the decision was "in line with guidance". At present, the UK government recommends people work from home to limit the spread of Covid-19.

Lloyds has 65,000 staff, the majority of whom are presently working remotely.

In September, the bank said it was cutting 865 jobs in areas such as insurance and wealth management as it revived plans to restructure the business.