Astonishing amounts of money

Tomorrow's Business

Executive pay is a thorny issue at the best of times. In these ones, it is going to be seriously controversial.

Expect CEO bonus tales to clash hard next year with rocketing unemployment, pay freezes for most of the rest of us, and indeed with hungry children relying on footballers to come to their aid.

Lloyds Bank today unveiled its new chief executive and was at pains to say he will be getting paid a bit less than the previous one. The incoming chairman, we are told, has also requested a 20% pay cut.

That is all well and good, but allow us to remain sceptical.

Lloyds has paid Antonio Horta-Osorio £56 million since 2011, and that doesn’t include whatever generous send off he gets this year.

That’s the real context in which executive pay should be judged, not minor nips and tucks.

Lloyds’ new man Charlie Nunn gets £2.4 million a year of “fixed” pay and about another £3 million on top of that.

So if he lasts ten years he will earn – sorry, I mean he will be paid— more than £50 million in all likelihood.

That is an astonishing amount of money for a managerial role. Nunn didn’t start Lloyds Bank in his uncle’s garage, he’s just an administrator.

I expect calls for restraint on executive pay to be ignored since they always are.

And I expect that editors, reporters and readers will get properly angry about this stuff just now.

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