Chairman apologises for PPI scandal at general meeting
by Luke Whitmore, 19th May 2011
Lloyds Banking Group is to reassess bonuses given to staff for
selling Payment Protection Insurance, in the wake of the court case
which has forced them to set aside £3.2 billion to refund customers
for mis-sold PPI policies.
At the bank's annual general meeting yesterday, bank chairman
Win Bischoff said that executive awards given to those who had
brought in extra profit through PPI sales would be looked at again
to see whether they should be withdrawn.
"The implications on compensation are being considered by the
remuneration committee and will be determined by the board in due
course, in line with the FSA code on compensation," Bischoff said.
Speaking of the manner in which the bank handled PPI, the
mis-selling of which has been revealed as an industry-wide scandal,
he stated "I have apologised for that and other chairmen may do the
same."
Taking back bonuses which turn out to be linked to mis-selling
may be possible under clawback provisions introduced last year by
the Financial Services Authority. These permit for bonuses to be
withdrawn if it turns out that they were based upon profitability
figures which later turn out to have been incorrectly calculated or
lead to no profit in the long run. However, it is not immediately
apparent whether these regulations can be applied to bonuses which
were paid before they came into effect.
With PPI mis-selling having been so widespread and leading to
banks having to pay out such vast sums in compensation, however, it
may turn out that these executive bonuses will be cancelled.
PPI, or Payment Protection Insurance, is a form of loan cover
which was sold to millions of customers, but there has recently
been a flurry of legal action over policies which turn out to have
been inappropriately pushed on borrowers. The banks have recently
come under obligation to compensate any affected customers for
mis-sold PPI.
If you're seeking to claim back PPI which was mis-sold to
you, we can help you with PPI reclaims.
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