After Lloyds, will RBS bankers face bonus clawbacks?
Lloyds is set to take back more than £1m from its senior executives after losing £3.2bn in PPI scandal
THERE were calls today for other banks to claw back bonuses from executives following a decision by Lloyds to relieve its bosses of more than £1m in pay.
Lloyds is expected to punish executives over the misselling of payment protection insurance (PPI), which cost the bank £3.2bn last year in compensation to customers.
The Daily Telegraph reports that Eric Daniels, former CEO of Lloyds, will lose at least £360,000 from his 2010 bonus of £1.45m. Four other former and serving directors will be stripped of around £250,000.
Conservative MP Nadhim Zahawi, a campaigner for banking reform, said other bankers should be stripped of their bonuses: "It should set a precedent for other banks. For too long it has appeared to the public that executive jobs at big banks are a one-way bet, that no matter what you do you get a huge reward.
"That has to change so that negligent behaviour at the top of banks has clear consequences and punishments."
A spokesman for consumer group Which? also welcomed the Lloyds clawback, adding: "The pressure is now on all the other banks involved in missellling. If they cannot swiftly and visibly punish those responsible, you have to question how serious they are about cleaning up their act."
Barclays and RBS, whose boss Stephen Hester recently gave up his bonus for 2011 following a public outcry, have also had to set aside money to pay customers who were missold PPI.
The BBC's business editor Robert Peston says that although the clawbacks represent a small proportion of the bankers' total pay, they will be important for their deterrent effect: "If bankers start to feel that there is a serious risk of impoverishment when decisions they take go bad - even when those decisions go bad several years down the track - it may make them kick the tyres a little bit more assiduously when they launch new products or do assorted deals."