The chief executives of the UK�s five leading banks, including three in line for government bailouts, earned £54m among them over the past five years.
Torcuil Crichton and Carolyn Churchill
The chief executives of the UK's five leading banks, including three in line for government bailouts, earned £54m among them over the past five years.
The staggering remuneration figures, detailing the cash and benefits enjoyed by bank directors, came as Chancellor Alistair Darling defined the rules for government bank aid ahead of a meeting of Lloyds TSB shareholders in Glasgow today that will decide on the proposed takeover of HBOS.
The figures, calculated by the left-leaning thinktank, the Labour Research Department, show that all the executive directors named in the annual reports of Royal Bank of Scotland, Lloyds and HBOS - banks in which the government will take a £37bn stake - earned a combined £122m in pay and cash bonuses, including more than £64m in bonuses alone. The figure excludes the shares paid out to the directors over the five-year period.
The details of the pay of senior executives is taken from annual reports between 2003 and 2007.
Using the material, the researchers calculated that the basic pay and cash bonuses, excluding share-based payments, of the five chief executive officers at HBOS, Lloyds TSB, RBS, Barclays and HSBC totalled more than £54m, including bonuses and benefits.
The investigation, carried out on behalf of the trade union Unite, claimed to expose excess and rewards for failure that have contributed to the near-collapse of Britain's banking system.
Unite called on the government to appoint a representative to the boards of the bailed-out banks who has the power to oversee and ensure a "fair and transparent" pay policy.
"Many of the short-term, high-risk decisions made by executive directors, which were richly rewarded, have proven to be disastrous for the economy," said Derek Simpson, joint leader of Unite.
"Directors will be foregoing their cash bonuses this Christmas but, thanks to them, millions face uncertainty in the new year.
"Boardroom pay practices are not only unjust - they have contributed to the worst financial crisis in decades."
HBOS, Lloyds TSB and RBS are all in line for government bailouts. Barclays, however, is facing shareholder anger following a decision to take £5.8bn from Middle East investors on terms tougher than the government offered. It has now cancelled this year's executive bonuses.
HSBC, meanwhile, used internal resources to boost the capital base of its UK banking subsidiary last month - injecting £750m of equity. Its shares have held up much better than those of its rivals.
The Chancellor has already made it clear he will have final approval on the new members of the recapitalised bank boards but will not have any direct influence on their day-to-day running.
Yesterday, the Treasury issued details of the rules for bank aid stating there was no automatic right for re-capitalisation for HBOS if it remained an independent entity.
The Chancellor's statement on the rules for government funding were being interpreted as a warning to HBOS shareholders when they meet on December 12 that they would vote down a takeover by Lloyds TSB at their peril.
This enraged the SNP who, along with former banking chiefs Sir Peter Burt and Sir George Mathewson, an economic adviser to the Scottish Government, want to keep HBOS independent.
In the Commons, Treasury spokesman Stewart Hosie said the government could not justify the "shotgun merger" and Alex Neil MSP said the Treasury was doing everything it could to "frustrate alternate plans that could keep HBOS independent and safeguard competition and tens of thousands of jobs".
However, as of last night, there were still no alternative bids for the ailing bank.
Accord, the union representing staff at HBOS, said it believed HBOS could not survive as an independent entity and the £12bn takeover by Lloyds TSB was the best way forward in the absence of any other serious bidder.
Employees of Lloyds TSB and HBOS will hold a demonstration today outside the Lloyds extraordinary meeting in Glasgow to remind shareholders that the voice of employees must not be ignored.
"The reality for ordinary bank workers is insecurity, unpaid overtime, inferior pension schemes, onerous performance targets and below inflation pay increases," said Unite's Derek Simpson. "For the culprits of the credit crunch it was gold-plated pensions, golden handshakes and huge rewards for failure."
