Lloyds starts fresh row over bonuses

4th Dec 2009 08:38

Gordon Brown hopes that a promise to Royal Bank of Scotland that it won't be singled out for tough treatment on pay will prevent high level resignations, but a new row at Lloyds threatens to fuel the debate on bonuses.It emerged last night that 200 bright lights at part-nationalised lender Lloyds Banking Group are in line for one-off payments worth as much as 80% of their annual salaries.The money is a thank you for overseeing the disastrous merger and integration of HBOS that has led to the loss of over 15,000 jobs.Prime Minister Brown had sought to cool tempers at RBS, currently 70%-owned by the taxpayer, after yesterday's warning that top bosses would resign if the Treasury interfered with the £1.5bn bonus pot available to 20,000 staff at its investment arm. He said none of the banks will be "discriminated against" during the bonus season as "every bank" will have to keep to the rules agreed by the G20. "I think most sensible people around the world will accept that if we come to a worldwide agreement about what the bonus structure should be then every major bank around the world will want to follow that," said Brown.The Lloyds bonuses are thought to include £2.4m for the board and a tidy £828,000 for chief executive Eric Daniels. Tensions are already high after it was revealed last week that the Bank of England provided emergency funding of £61.6bn to RBS and HBOS as the financial system faced meltdown at the end of 2008.Lending to HBOS, now part of 43% state-owned Lloyds, began on 1 October and peaked at £25.4bn on 13 November. All the money had been paid back by 16 January. RBS's borrowing hit £36.6bn on 17 October after asking for cash on 7 October, but the government-owned bank managed to clear its debt a month later. Lloyds' shareholders will feel especially angry as the bonus revelation comes at a time when they're being asked to cough up more cash to take part in a world record £13.5bn rights issue at 37p a share.