Bonus culture: the real cost of bank FDs

Chris Lucas, Barclays

Joined in April 2007. Previously partner at PwC.

Pay in 2007: Salary of £450,000 with benefits worth £135,000 and an annual cash bonus of £450,000.
Performance bonus and Executive Share Award Scheme: Awarded 69,091 shares in 2007. Maximum 30% bonus, plus share award worth £195,000 to be made this March.

Performance Share Plan: 82,910 shares worth £599,000 with a possible 248,730 shares (£1.8m) subject to performance.

Other: 3,638 share options under Sharesave, exercisable at £4.83 (£16,800) and has a beneficial interest in 38,003 shares. Base salary rose to £650,000 in April 2008.

Share price today: 68p

Mike Ellis, HBOS (now Lloyds Banking Group)

Rejoined in September 2007 having been FD from 2001 to 2004.

Pay in 2007: Salary of £169,000, benefits worth £45,000 and cash bonus of £78,000. Ellis also receives a pension from his previous employment by HBOS.

Long-term Incentive Plan: Granted 20,114 shares in 2007; 25,972 shares held from 2004 scheme were released during the year.

Other: Had a beneficial interest in 350,545 shares. The Guardian estimated that Ellis left the group with £850,000, including share performance schemes. HBOS
shares converted to Lloyds shares at a ratio of 0.605 Lloyds shares per HBOS share.

Share price today (Lloyds): 46p.

Douglas Flint CBE, HSBC

Joined HSBC in 1995 having been a KPMG partner.

Pay in 2007: Salary of £679,000, pensions allowance £374,000, benefits 325,000, performance bonus of £800,000 ­ a total of £1.9m.

Performance shares: Awarded 246,185 shares under the long-term incentive plan with an expected value of £968,000. Vesting of performance shares depends 50% on total shareholder returns compared with 28 major banks measured over three years: A ‘top 7’ ranking = 100% award, ranking 14th = 30% award, below that: nil.

Other: Beneficial owner of 83,467 shares and trustee over 29,314. Bonuses in 2008 to be determined by a balanced scorecard.

Share price today: £3.62.

Guy Whittaker, RBS

Joined RBS in February 2006 from Citigroup.

Pay in 2007: Salary of £760,000, performance bonus of £1,425,000, pension allowance of £262,000.
Share options: Granted 280,749 options in 2007 at an exercise price of £5.61. Holds a total of 454,539.

Performance plan: Had 113,391 shares at the start of 2007 and awarded 107,298 more, then worth £1.5m.
Restricted stock award: Held 373,533 shares at the start of 2007 worth £2.4m of which 168,855 shares (worth £1.1m) vested during the year. A further 91,449 shares vested during 2008.

Other: Beneficial owner of 278,191 shares worth £1.2m at end-December.

Share price today: 20p.

Tim Tookey, Lloyds Banking Group

Became deputy FD in 2006 and acting group FD in April 2008, succeeding Helen Weir.

Pay in 2007: He was appointed to the board in 2008, so there are no salary details available yet. Tookey’s predecessor earned £575,000 in basic salary, £40,000 in benefits, £115,000 payment in lieu of pension and £891,000 bonus in 2007, with long- term incentive plan payment worth £725,000.

Other: The Lloyds board announced that executive directors agreed to forego bonuses ‘of their own accord’.

Share price today: 46p

This is an abridged version of an article that first appeared in Financial Director magazine. See the full article at financialdirector.co.uk