Lloyds Banking Group boss Antonio Horta-Osorio has revealed that he will not take his annual bonus for 2011 after he took a two-month leave of absence.
Horta-Osorio, 47, took time off to address severe sleeping problems in November. He returned to work this week and acknowledged that his absence had had an impact on the bank.
He went on to say that his bonus should reflect the performance of the bank, but also the “tough financial circumstances that many people are facing”. Horta-Osorio has led by example after chancellor George Osborne issued a warning to banks against making big bonus payouts on Thursday.
Horta-Osorio could have received a maximum of 225 per cent of his annual salary, which equates to a total of £2.4m. His decision not to accept a bonus comes after reports that Royal Bank of Scotland investment banking arm boss John Hourican could pick up £4m in long-term incentive shares that he was awarded in 2009.
Lloyds chairman Sir Win Bischoff revealed that its board had accepted Horta-Osorio’s request not to receive his bonus. He said: “Under Antonio’s leadership, the bank made significant progress last year in its transformation against a very difficult economic backdrop.
“However, given the economic circumstances, the financial challenges that many people are facing and his recent leave of absence, Antonio felt it appropriate not to be considered for any award he might receive under the group’s annual bonus scheme for 2011.”
Horta-Osorio was in the process of implementing his strategic review when he decided to seek help over his inability to sleep. He said: “My goal remains to restore the bank to profitability enabling us to support the country’s economic recovery sustainably and giving taxpayers the opportunity to get back their money.”
Speaking about the past few months, he added: “I’d go to bed exhausted but could not sleep. I could not switch off. I understand now why they use sleep deprivation to torture prisoners.”
Lloyds has agreed to an initiative from Horta-Osorio which will reduce his direct reporting lines and strengthen the roles of its senior management team. Details of his pay and bonus entitlement will be revealed in the Lloyds’ annual report in February.