Lloyds may confiscate part of former CEO Eric Daniels’ bonus after PPI miss-selling on his watch cost the bank nearly £10bn ($16.7bn) in compensation.

According to British newspaper The Times, the bank’s remuneration committee will decide over the next few days whether to pursue Daniels and confiscate some of his 2010 bonus.

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Meanwhile current CEO Antonio Horta-Osorio has defended his own £1.7m bonus:

"I strongly believe you should link compensation with performance, and having increased our underlying profits by 140%, we thought it was appropriate to increase the bonus pool of the bank by 8%."

Osorio also argued that as his bonus is to be 78% paid in shares that cannot be cashed in until 2019, it will drop in value if his leadership causes the bank to lose money.

It also ties his interests to those of the taxpayer, as Lloyds is still 33% public-owned.

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"I have also agreed to have additional conditions to my bonus, which is fully paid in shares, which aligns my interests with the interests of the taxpayer, so if the strategy we are pursuing proves itself wrong, that money can be clawed back."

Daniels stepped down from Lloyds in 2011 and currently holds a senior adviser position with both buyout group CVC Capital Partners and investment group StormHarbour.

The total cost to the UK banks of the PPI miss-selling scandal now stands at nearly £20bn.

 

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