Lloyds bonuses ‘will be limited’

Mr Brown insists the government does not want to punish banking staff

Limits are to be agreed on staff bonuses at the new Lloyds Banking Group, Gordon Brown has confirmed.

The government was now working “to agree a fair package for staff” at the bank, the prime minister wrote in an article for the Times newspaper.

His comments come a day after the chancellor outlined bonus limits at Royal Bank of Scotland (RBS).

The government has a near 70% stake in RBS and owns 43% of Lloyds, which was formed after Lloyds TSB bought HBOS.

Culture change

Mr Brown reiterated the government’s opinion that as a condition for the banks being bailed out with taxpayers’ money, they had “to end the short-term bonus culture”.

But he insisted that the aim was not to undermine banking staff.

“None of these actions is designed to punish or scapegoat City workers,” he said.

“But we must also be clear that the old excesses, the one-way bets, have to be consigned to the past.”

The prime minister added in his weekly press conference from Downing Street that bonuses could be “clawed back” if a bank employee’s improvement in performance was not sustained.

Chancellor Alistair Darling said on Tuesday that bonuses at RBS would be cut from the £2.5bn paid last year to £340m, which includes £175m for investment bankers and £165m for lower-paid staff.

In addition, bonuses to “essential staff” will be paid in stages from 2010 and will no longer be paid in cash, but in corporate bonds.

Reports suggest the value of those bonds could be in the region of £600m, but RBS says the value has not yet been agreed.

source: bbc.co.uk