Pay row: Lloyds chief executive Antonio Horta-Osorio with wife Ana
Lloyds bosses will be hauled to Parliament to explain to MPs why they gave chief executive Antonio Horta-Osorio a pay rise which more than made up for a cut to his pension.
With investors demanding a crackdown on lavish retirement schemes, the High Street bank slashed pension payments to Horta-Osorio from 46 per cent of his salary to 33 per cent, reducing the perk by £154,000 a year, while increasing his salary and benefits by £175,000.
Critics have branded the move a stealth pay rise which goes against the spirit of a crackdown on lucrative executive pensions.
The work and pensions committee plans to investigate the huge payments to FTSE 100 bosses, and will ask Lloyds to explain its actions.
Committee chairman Frank Field, an independent MP, said: 'We will be asking companies to account for themselves when they submit evidence to our review.'
Horta-Osorio's pension falls foul of Investment Association guidelines which say a chief executive should get payments towards their retirement equal to no more than 24 per cent of their base salary.
In 2018 the banker's pension package was among the Footsie's most lucrative, at 46 per cent of his £1.2million base salary, or £573,000 in total.
He has now agreed to slash this to 33 per cent or £419,000 in a bid to placate critics – £154,000 less.
But at the same time, the 55-year-old is getting a £25,000 annual rise in his base salary, while the amount he gets in fixed share payments each year is being boosted by £150,000 to £1.1million.
Lloyds claims the fixed share increase is because regulation known as ring-fencing means he is now looking after a more complicated organisation.
But all the large lenders have been through ring-fencing and Lloyds is the only one to have given its boss a pay rise as a result.
Lloyds made a profit of £6billion last year, up 13 per cent on 2017.
Horta-Osorio – who oversaw the bank's return to private sector ownership following its bailout by taxpayers during the financial crisis –was paid £6.3million in total, more than any other bank boss in the Footsie.
Labour MP John Mann, a member of the Treasury select committee, said: 'This pay increase is completely inappropriate and should be abandoned.
'It looks like Lloyds is simply shifting the numbers around so it can carry on paying its boss a disproportionate sum.
'Not only is this against the spirit of efforts to reduce pension payments, it also takes Lloyds' investors, staff and customers for fools.'
The IA pension guidelines are meant to bring chief executives' retirement payments in line with the rest of their staff. At Lloyds, most workers get a maximum of 13pc of their salary towards their pensions.
The bank is one of as many as 54 Footsie firms which pay pension contributions to their bosses of 25 per cent or more.
While he would not comment on the specifics at Lloyds, the IA's stewardship director Andrew Ninian said: 'The guidance has been clear – we don't expect compensation to be paid. We will look at individual cases on a case by case basis.'