Lloyds Banking Group PLC has warned employees to expect a smaller bonus pot after the British lender suffered from several problems in 2019, The Guardian reported.
Lloyds employees, including CEO António Horta-Osório, received a memo warning them to expect smaller bonuses for the 2020 payout, shortly after the bank revealed a £1.8 billion charge related to payment protection insurance claims in October 2019, according to the report.
The bonus pool is set at 5.1% of full-year underlying profit as long as Lloyds reaches a minimum threshold, but could be reduced if the bank's remuneration committee sees that the group underperformed in certain categories, the newspaper said. The pot, which is paid out through shares and cash, was set at £464.5 million in 2019.
Lloyds is also expected to cite the outcome of an independent review on the bank's compensation scheme for fraud victims at the Reading branch of HBOS PLC, which prompted the group to reopen the scheme in December 2019, as a reason for the bonus cuts, The Guardian added. The bonuses are expected to be paid out in April.
Lloyds said its remuneration committee has yet to make a decision on the bonuses.