Lloyds retracts some executive bonuses

Lloyds Bank in Britain said it was taking back about $3 million in bonuses awarded to 13 executives after their decisions cost the bank $5 billion. The bank has not yet handed out the bonuses, which are on a three-year delay based on a "clawback" system, which allows the bank to cancel bonuses that are based on investments that sour. The Daily Telegraph said Monday that the executives are "furious," after the bank announced it "will make an adjustment to a proportion of the bonus awards in respect of 2010 for a number of its senior employees, including five executive directors." Former Chief Executive Officer Eric Daniels will not be paid 40 percent of his bonus for 2010. This subtracts $919,000 from his $2.3 million bonus for that year, the newspaper said. Four other executives will lose 25 percent of their bonuses for 2010, while eight others were to have their bonuses cut by 5 percent. The bank also the $5 billion lost also affected the bonus pool for 2011. "The bonus pool for 2011 will reflect a further reduction in respect of the above mentioned provision, which will affect all individuals eligible to be considered for a discretionary bonus for that year," Lloyds said in a statement. Bank regulators in Britain, consumer groups and politicians all put pressure on Lloyds to retract the bonuses. The bank is 41 percent owned by taxpayers, which had to bailout out Lloyds to get through the financial crisis. Ironically, the $5 billion scandal involved selling payment protection insurance to customers. The program was often sold to customers who took out loans, as it was supposed to cover wages if the borrower fell ill or lost a job. Watchdog group Which? in 2008 called the insurance "worthless" for many of those who purchased it and in 2011 the High Court said consumers could pursue payments, which led to the bank setting aside $5 billion to cover their claims.