The chief of Lloyds declines to take any bonus payments this year.
If you want to annoy someone who owns banking shares, it's pretty easy -- just whisper the words "directors' pay" or "bankers' bonuses" in their ear and watch the steam coming out of their collar.
Since the days of Fred ("the Shred") Goodwin, who presided over the collapse of Royal Bank of Scotland (LSE: RBS) and helped record the UK's worst ever corporate loss of £24bn, but who went away with exceptionally well-stuffed pockets and a massive pension, the topic of handsomely rewarding those at the top for performances that would get most of us the sack has been a hot one.
Against a background of what many see as excessive greed, it's refreshing to hear the words of Antonio Horta-Osorio, who took the helm of Lloyds Banking Group (LSE: LLOY) in March last year.
Mr Horta-Osorio has had a couple of months off due to a stress-related illness and, on his return, has announced that he will not take any bonus for 2011 on the grounds that his absence has had an impact on the bank, saying: "As chief executive, I believe my bonus entitlement should reflect the performance of the group but also the tough financial circumstances that many people are facing."
A large wad
He's turning his back on quite a tidy sum, too. He has a basic salary of £1.06m, and would have been in line for bonus payments of up to 225% of that figure. Okay, he's still earning a cool million, and is still eligible for shares as a long-term incentive. But it's a pretty modest salary by the standards of top executives these days, and there are few among his peers who would let even a penny go without a fight.
Stress is understandable in a job like this, as Mr Horta-Osorio is presiding over a massive restructuring at Lloyds that has led to large-scale redundancies -- it's tough work, but it's necessary, and the general feeling seems to be that he's doing a good job.
Customers who have been mis-sold payment protection insurance should take heart too, as one of his first tasks was to set aside a £3bn pot to cover compensation claims.
So is this the start of a cleanup in the banking business and an end to the culture of greed that got us in this mess in the first place? Well, no. But after the reckless 'fat cat' times of the recent past, it does make a pleasant change.
Will other banks take heed and rein in the cash they hand over to their top bosses? Please share your thoughts, below.
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