LLOYDS boss Antonio Horta-Osorio said he is “very confident” taxpayers will get their money back after the bank’s bailout at the height of the financial crisis.
Mr Horta-Osorio said his controversial £1.5m annual bonus is to only be paid once the shares are trading above the 73.6p the Government bought in at or else the Government sells a third of its stake for more than the break-even price of 61p.
His bonus will be paid in shares and is to be deferred until 2018.
The banking giant said that staff will share out a £365m total pot.
Trade union Unite hit out at the bank’s bonus plans, which come after RBS said it was paying staff £607m in bonuses despite reporting losses of £5.2bn for 2012.
United national officer Dominic Hook said: “Lloyds is still making a loss and it’s tainted by scandal, there is no justification for Antonio Horta-Osorio’s share pot.”
David Hillman, spokesman for the Robin Hood Tax campaign, said: “It can’t be right that for the second time in two days a bailed-out bank is paying hundreds of millions in bonuses despite making losses.
“Victims of the PPI scandal must wish Lloyds was as quick to pay out compensation as it is to hand out bonuses to its top brass.”
Lloyds, which is 39 per cent taxpayer-owned, said each employee will receive around £3,900 on average, although cash bonuses have been capped at £2,000.
Sir Win Bischoff, chairman of Lloyds, said: “We believe our employees should be rewarded for their contribution to the further strengthening of the business in 2012.”
Mr Horta-Osorio, who requested that his bonus is linked to the taxpayer bailout price being achieved, said: “It’s my absolute focus and commitment to get taxpayer money back.”
A Treasury spokesman said: “The Government’s strategy remains to see Lloyds continue the progress it has made in reforming itself into a strong and sustainable bank that supports the British economy, which in time can be returned to full private ownership.
“These results show that it is making strong progress in improving its core underlying performance and strengthening its balance sheet, but that there is still work to be done as it continues to deal with the legacy of the past.”
In annual results yesterday Lloyds set aside another £1.5bn to compensate customers mis-sold loan insurance, hitting its shares and tempering prospects for a swift sale of the Government’s stake.
Lloyds now expects to pay out a total of £6.8bn to customers wrongly sold payment protection insurance (PPI), more than any other bank.
More than £14bn has been set aside by UK banks to deal with PPI and the final bill could be as much as £25bn, according to analysts.
Lloyds’ shares closed down two per cent last night, a fall of 1.2p to 53.3p.
Shares in Lloyds have had a strong run, up by 44 per cent in the last 12 months, as Mr Horta-Osorio cut the bank’s loan book and costs more quickly than expected and reined in bad debts.
Lloyds said it remains in the red with £570m of losses in 2012 after the mis-selling provisions.
This compares with a £3.5bn loss in 2011.
On an underlying basis, the results showed a big rise in group profits from £638m to £2.6bn in 2012.
This was ahead of analysts’ forecasts of £2.4bn.
The bottom-line loss followed the extra £1.5bn PPI compensation and another £310m for interest rate swap mis-selling claims in the fourth quarter.
Lloyds is one of more than 12 banks being investigated by regulators for their role in a global rate-rigging scandal, but the group’s finance director George Culmer said it is not one of the banks at the centre of the probe.
Mr Horta-Osorio said Lloyds’ plan to sell 632 branches to the Co-Op remain “on plan” despite reports that it was on the verge of collapse.
The bank is also preparing for a stock market listing of the branches as a fall-back option.
Mr Horta-Osorio said a decision will be made on whether to sell to the Co-Op or do an IPO by the end of the second quarter this year
“When we signed the deal with the Co-Op we always said it would be our favourite route, but we’d keep open an alternative plan which was an IPO,” he said.
Before a decision is made Lloyds is creating a new fascia for the 632 branches under the TSB name.
“The Co-Op are absolutely committed to doing this deal. We will have to make a decision by the end of the second quarter,” said Mr Horta-Osorio.
There were reports earlier this week that the Co-op is battling to plug a potential £1bn capital hole discovered by the Financial Services Authority.
Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said: ““Despite an initial share price fall set against a weaker market open, the results have received a warmer welcome than those of RBS – and with good reason.
“Niggles undoubtedly remain on the investment case. The company remains a work in progress, although apparently further down the line than the likes of RBS.
“Similarly, the government stake overhang and the ongoing lack of a dividend are obstacles for potential buyers of the stock, whilst the distraction of the branch sale and the further PPI provision are headwinds.”