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1 in 5 Lloyds shareholders oppose execs' pay plan in heated AGM

Lloyds Banking Group PLC faced investor attacks as shareholders hit the bank with allegations of customer mistreatment and opposed a pay policy for its executives.

During the bank's May 24 annual general meeting, 20.78% of its shareholders voted against top executives' remuneration plan. Among those who dissented was TV presenter Noel Edmonds, who purchased 1 share in the bank so he could attend the meeting, Sky News reported.

Ahead of the AGM, proxy advisory firm Institutional Shareholder Services advised Lloyds shareholders to contest the pay policy, deeming it "unduly complex." ISS reportedly estimated CEO António Horta-Osório's pay package to be about 95x what an average Lloyds employee receives.

However, the shareholders' vote will not change the remuneration as it is purely advisory.

The meeting was reportedly heated from the start, Reuters reported May 24, as one investor shouted "You're a liar and cheat" at Chairman Norman Blackwell. Edmonds, who is seeking compensation from Lloyds over alleged fraud at HBOS PLC's Reading branch, also told executives: "If you want to turn it into a game show, the way you treat us, I would call it 'Pointless.'"

Blackwell responded by saying that the meeting "isn't a show," Sky News reported.

In January 2017, six people, including two former HBOS bankers, were convicted in relation to suspected fraud at the Reading branch of HBOS, which Lloyds acquired in a controversial takeover. Lloyds has since apologized to the victims and had earmarked £100 million for compensation, Reuters reported.

Shareholders also questioned the bank's customer service, raising concerns about the mortgage rates it charges "vulnerable" small businesses. The U.K. Financial Conduct Authority said around 30,000 customers who took out home loans from Lloyds before the financial crisis are now mortgage "prisoners" as terms of the deal bar them from switching to better rates, Reuters wrote.

Shareholder Lisa King said she could have saved £500 per month by switching and that she and her husband have suffered "five years of living hell" due to the financial constraints, the report added. Blackwell then said he was not familiar with King's case but would have it investigated.

The debacle poses yet another challenge for Lloyds to gain back customer trust, which has been damaged after years of flak. In April, the bank reported a 29% year-over-year increase in its first-quarter profit to £1.15 billion from £890 million.