Banking Bosses Waive Bonuses
The FTSE 100 index struggled for direction on Monday afternoon, eventually closing down 6.10 points or 0.1% at 5,352.07 on a day when trading volumes were thin. This ended a winning streak of five consecutive days as strength in the financial sector was offset by weaknesses in traditionally defensive stocks, such as pharmaceuticals and tobacco.
Dominic Turner
shareprices.com - Monday, February 22, 2010
The board of Lloyds Banking Group showed its appreciation of the leadership of Chief Executive Officer, Eric Daniels – the driving force behind the ultimately disastrous merger with Halifax Bank of Scotland (HBOS) in 2008 – by offering him a bonus of £2.3 million. Lloyds' remuneration committee recommended the bonus in light of the significant progress that had been made since the merger. However, Mr. Daniels' opposite number at Royal Bank of Scotland (RBS), Stephen Hester, had already waived his bonus, worth £1.6 billion, this year, so the pressure was on Mr. Daniels to follow suit. Ultimately, he did bow to public pressure and waive his own bonus.
RBS, which is expected to post a loss, albeit smaller than last year, later in the week, closed up 1.25p or 3.62% at 35.78p, whilst Lloyds Banking Group, which is expected to do likewise, closed up 1.43p or 2.82% at 51.95p. Collectively, the part-nationalised lenders are expected to report almost £10 billion in losses after a year of painful rebuilding. By contrast, Barclays, which received no Treasury funding during the financial crisis, reported record profits of £11.6 billion last week; its share price closed up 4p or 1.28% at 316.25p.
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