Shareholders set to grill Lloyds board on bonuses

Mr Daniels, the only boss of a rescued UK bank to have retained the top job through the crisis, and one of few worldwide, waived a more than 2m bonus in February, bowing to growing pressure on bank bosses.

His decision followed in the footsteps of counterparts at Barclays, part-nationalised Royal Bank of Scotland and others in the face of intense public anger.

But the decision to award Daniels the full bonus at all - during one of the bank's worst years - raised shareholder concerns and has been blamed for the unexpected decision in March by the chair of the remuneration committee, Wolfgang Berndt, to retire at the shareholder meeting.

At least one major investor - UK Financial Investments (UKFI), which manages the government's stakes - considered voting against Mr Berndt's reappointment, an industry source said.

Pirc, which advises institutional investors, has told shareholders to reject pay proposals which it said are potentially "excessive", adding to an "amber top" notice from the Association of British Insurers, which warns shareholders to think carefully before casting a vote in favour.

Lloyds, which bought beleaguered rival HBOS at the height of the crisis and is now 41 per cent state-owned, is holding its annual shareholder meeting against an improving backdrop for both the UK economy and the country's largest retail bank.

Its last general meeting late last year saw the bank's army of small shareholders grilling the board for more than three hours over mistakes made during the crisis.

But in good news for shareholders, Lloyds said last week it returned to profit in the first quarter, earlier than expected, as losses on both retail and commercial bad debts fell.

Lloyds expects to deliver a profit on a combined basis at both the half-year and the full-year.

Lloyds shares are trading just under 60 pence, just shy of the 63.2 pence average paid by the government for its investment, net of fees. Levels above that indicate taxpayers stand to make a profit in a share sale, though that is not widely expected before early next year.