Anger over Lloyds pay packages

LLOYDS TSB is under fire for making £1m-plus pay and options awards to top executives, at a time when the High Street banks stand accused of ripping off small business customers.

US-born Eric Daniels, recruited in November from a Latin American dotcom to run retail banking, was granted an option to buy 216,763 shares at the end of 2004 for a total price of £1. The award, worth £1.56m at current share prices, is to 'encourage him to stay with the company'. It comes on top of £75,000 salary and benefits of £117,000 for just two months' work in 2001.

Chief executive Peter Ellwood received a £1m pay packet, up 17% on the previous year. He has an annual pension entitlement of £336,441 and held just over 320,000 options exercisable at the end of last year. These are worth £1.17m at current share prices. Deputy chief executive Mike Fairey took home £1.67m after exercising £882,000 of options.

Stuart Bell of corporate governance campaigners Pirc said: 'All share awards should have performance conditions.'

Lloyds TSB and its rivals face a crackdown by Chancellor Gordon Brown after accusations that they rip off small firms to the tune of £1bn a year. The bank's profits fell from £3.86bn to £3.55bn in 2001.

Dai Davies, of banking union Unifi, said: 'Bank bosses should be well paid, but we object to increases way ahead of ordinary staff.' Lloyds TSB said employees received pay rises of up to 8% last year.