“An element of leadership can be saying enough now, we need to change” Heidi Allen MP questioned Antonio Sorta-Osorio, the Chief Executive of Lloyds Banking Group, on his £6.27M pay package during the Work and Pensions Select Committee oral evidence session on Executive pensions.
Heidi and the Select Committee wrote to the Chief Executive questioning why his pension contribution rate stands at 33%, when the maximum employer contribution rate stands at 13% for other Lloyds employees.
In March, the Business, Energy and Industrial Strategy (BEIS) Committee published a report saying that companies must do more to link top bosses’ pay to that of the rest of their workforce.
The UK Corporate Governance Code states that:
“Pension contribution rates should be aligned to those of the workforce…Investors expect new executive directors to be appointed on this level of pension contribution. The contribution rate for incumbent executive directors should be reduced over time to the contribution rate available to the majority of the workforce…”
The Investment Association, a trade body that represents UK investment managers, highlighted that “one impediment to companies achieving swift” compliance is a contractual obligation regarding pensions. However, they quickly explained this could be avoided if, like HSBC, the Director willingly gives up his contributions.
You can read more on this following this link.