Lloyds faces investor grilling

Shareholder groups the Association of British Insurers (ABI) and Pirc have both raised concerns about Antonio Horta-Osorio’s signing-on deal, worth up to £13.4m, to their members.

ABI, whose members control up to 20 per cent of the stock market, issued an amber-top alert over the pay package, while Pirc recommended voting against the Lloyds remuneration report.

Both shareholder groups have also highlighted the issue of disclosure, as performance targets for long-term incentive plans (LTIP) have not been made public, which means investors will vote on the plans at the AGM in Glasgow without knowing full details.

Lloyds, which revealed a £3.2bn provision for payment protection insurance claims earlier this month, is expected to reveal the LTIP details in its strategic review next month.

Pirc said Mr Horta-Osorio received a grant of shares equalling 420 per cent of his base salary upon joining the company and it would flag this as a “major concern” adding “especially following a financial year where the bank reported a net loss”.

Shareholders are also likely to grill the board over the future of the group’s Scottish Widows subsidiary. Scottish Widows, the Edinburgh-based life assurance and asset management business, was bought by Lloyds for £7bn in 1999. But there has been increased speculation that Mr Horta-Osorio, views the business as “non-core” and will sell the business as part of his strategic review.