Scottish Widows chief Archie Kane's pay package has soared by nearly 50% in just two years, it has emerged.

Since being drafted in to replace the ousted Mike Ross as head of the Lloyds TSB life and pensions subsidiary, moreover, the 54-year-old chief executive has doubled his total remuneration.

Lloyds' annual report shows that Kane earned £1,252,000 last year, a 36% increase on the £919,000 he banked in the previous 12 months and 46% more than in 2004.

Last year's package included a basic salary of £500,000 and a performance bonus of £715,000, together with other benefits worth £37,000.

Kane also saw his pension boosted by £715,000 in 2006. This gives him a personal retirement pot of £4.4m and entitles him to an annual pension of £265,000, up from £240,000 in 2005.

Kane, formerly group executive director of IT and operations at Lloyds TSB, took over from Ross at the helm of Edinburgh-based Widows in autumn 2003. He earned £622,000 that year.

In February Scottish Widows, reportedly the object of a European bid approach to Lloyds last November, revealed that it forged stronger business ties with its parent last year. Widows reported a 62% rise in bancassurance business to £5.3bn, as a leap in sales of its investment funds through bank branches fuelled the majority of the insurer's sales growth for 2006.

In a year which saw heady growth of almost 30% in the UK life and pensions market on the back of pension reforms, Kane said Widows' market share on the traditional annual premium equivalent (APE) measure had stayed "about the same".

Lloyds TSB's annual report also reveals that basic pay rates and potential bonuses for the bank's executive directors were greatly increased from January 1 this year. Kane got a 10% rise in his basic salary, to £550,000, and his potential bonus was increased from 150% of salary to 200%. Kane could earn £1.1m in bonus alone in 2007.

"Following detailed independent market analysis and review, it is apparent that certain levels of basic salary as well as our maximum bonus opportunity, including the level of award for on-target performance achievement, are behind the market, particularly when compared with our main competitors in the financial services sector," Lloyds' remuneration committee explained. "As a result, the salary adjustments implemented from January 1 2007 have been designed to bring base pay levels closer in line with the competitive marketplace."

The maximum potential bonus has been increased for all Lloyds executive directors from 150% to 200% - with the exception of chief executive Eric Daniels, for whom it has risen from 175% to 225%. Last weekend it was disclosed that Daniels received a 27% jump in his total pay last year to £2.4m.

Pre-tax profits at Lloyds TSB climbed 11% in 2006, to £4.25bn.

Aside from Kane, the other Scots on Lloyds' main board include finance industry veteran Ewan Brown, part-time chairman of Lloyds TSB Scotland. Brown was paid £134,000 last year, £50,000 more than he got two years earlier and £12,000 more than in 2005. This is despite the fact that he stood down from the remuneration committee part-way through last year.

Brown, 64, was executive director at Edinburgh investment bank Noble Grossart until 2003.

Gavin Gemmell, the chairman of Scottish Widows, earned £121,000 in 2006, a sum unchanged on the previous 12 months. The 65-year-old retired in 2001 as senior partner of Edinburgh fund manager Baillie Gifford after 37 years with the firm. Gemmell attended 11 full board meetings of Lloyds last year, together with six meetings of the audit committee.

On January 1 2007, Lloyds' non-executives got a 20% rise in their basic fee for board membership, to £60,000. Fees for membership of the audit and remuneration committees were increased by 25%, to £50,000 and £25,000 respectively.