Lloyds Banking Group's CEO Charlie Nunn is set to benefit from the UK's decision to scrap the cap on banker bonuses, which could see his annual pay package increase by as much as 45% and reach a value of over £13m.
Under new rules, Lloyds' remuneration committee has begun drafting a three-year executive pay policy that will take advantage of the looser pay rules. This is similar to rival banks such as Barclays and HSBC, which have already proposed significant increases in their CEOs' maximum pay packages.
The move comes after UK regulators lifted the banker bonus cap in 2022 as part of post-Brexit rules aimed at making the City more attractive to financial services firms. Proponents argue that higher pay is necessary to lure top talent and US businesses to Britain, with some pointing to the large pay packets offered on Wall Street.
However, not all are convinced that this approach will yield better results. Critics have argued that banks simply inflate salaries to make up for lost earnings potential and that the removal of the cap gives banks less control over their pay packets.
Lloyds' proposed new policy would see Nunn receive a significantly reduced fixed salary, with a higher performance-related variable reward opportunity. The bank's spokesperson said that the proposals would align with regulatory requirements while offering competitive remuneration that rewards delivery of long-term value for customers and shareholders.
The move is likely to be closely watched by investors as Lloyds prepares to present its new pay policy proposals to shareholders later this year. With the scrapped bonus cap already seeing significant payouts at rival banks, it remains to be seen how much Nunn's pay package will increase.
Under new rules, Lloyds' remuneration committee has begun drafting a three-year executive pay policy that will take advantage of the looser pay rules. This is similar to rival banks such as Barclays and HSBC, which have already proposed significant increases in their CEOs' maximum pay packages.
The move comes after UK regulators lifted the banker bonus cap in 2022 as part of post-Brexit rules aimed at making the City more attractive to financial services firms. Proponents argue that higher pay is necessary to lure top talent and US businesses to Britain, with some pointing to the large pay packets offered on Wall Street.
However, not all are convinced that this approach will yield better results. Critics have argued that banks simply inflate salaries to make up for lost earnings potential and that the removal of the cap gives banks less control over their pay packets.
Lloyds' proposed new policy would see Nunn receive a significantly reduced fixed salary, with a higher performance-related variable reward opportunity. The bank's spokesperson said that the proposals would align with regulatory requirements while offering competitive remuneration that rewards delivery of long-term value for customers and shareholders.
The move is likely to be closely watched by investors as Lloyds prepares to present its new pay policy proposals to shareholders later this year. With the scrapped bonus cap already seeing significant payouts at rival banks, it remains to be seen how much Nunn's pay package will increase.
, you know when we used to have a strict limit on bankers' bonuses and stuff? now they're just gonna be able to give out whatever they want? 
it's like playing Monopoly, you gotta wonder who's gonna win the game. I mean, I get it, wanna attract top talent and whatnot, but can't we just keep things fair for once? 
it's not like they're curing cancer or something... a £13m payday package is just wild, what's next? 
. Like, what's wrong with having some caps on banker bonuses? It was there for a reason, you know? And now that it's gone, who's gonna make sure these guys don't get outta control with their salaries? 
. And now investors get to reap the rewards of whatever Nunn decides to do with his pay package... just great 
.
. Don't get me wrong, I'm all for good pay that reflects hard work, but this just feels like a way to show off instead of really helping the company or society as a whole 
. Maybe if we shifted our focus to fairer pay structures, we could encourage more talent and innovation rather than just throwing money at the problem 
is that they're basically saying it's better to give people a higher variable reward instead of a decent fixed salary. Like, what's the point of that?!? 
, I bet it'll be a wild ride 
The UK just gave a big thumbs up to sky-high banker bonuses and I'm low-key worried about the long-term effects 
. But can we really say this approach will lead to better results? 
i know some ppl say its too much but idk maybe its true dat top talent wud be lured by it 
& btw can u even imagine what nunn would do w/ £13m 
is it really that simple? just because someone's getting a bigger pay packet doesn't mean they're gonna make better decisions or run the bank more efficiently... it's all about supply and demand, right? but what if we were to flip this on its head? what if we prioritized long-term value over short-term gains? would that really make us more attractive to top talent? 