Thursday 12 May 2016 3:38 pm

Lloyds shareholders won’t do what they’re told

Shareholders at Lloyds Banking Group have clearly not caught shareholder spring fever, passing all resolutions at its AGM today, despite an influential shareholder advisory group urging them vote against the remuneration report.

Shareholders approved the remuneration report by 97.7 per cent, which puts chief executive Antonio Horta-Osorio in receipt of £8.8m for 2015, down from £11.5m the year before.

Despite Osorio's paycut, there were some murmurs that Lloyds' AGM could be host to the next shareholder revolt. At the end of last month, shareholder advisory group Pensions & Investment Research Consultants issued a note urging a vote against the remuneration report.

"The mood music at the moment is not conducive to large executive reward packages," explained Laith Khalaf, senior analyst at Hargreaves Lansdown, ahead of the AGM. "Excessive executive pay is not a new issue, but it has probably come to the fore in 2016 for three main reasons.

"One is share prices are generally lower than they were a year ago, which has focused minds on how much executives are taking out of the business – shareholders with buoyant portfolios don’t tend to cause too much trouble.

"At the same time shareholder action groups have really got the bit between their teeth this spring when it comes to payouts, while at the same time corporate governance is also rising on the agenda at fund management groups, who are becoming more vocal about remuneration packages."

Shares in Lloyds are trading roughly 25 per cent lower than they were this time a year ago, closing on Wednesday at 65.7 pence per share.

This AGM season has been a mixed bag for shareholder reactions, with dramatic revolts taking place over pay at BP and Weir Group, while Man Group and Anglo American saw their resolutions scrape through by the narrowest of margins. On the other hand, resolutions were passed with relative ease at Rolls Royce and GlaxoSmithKline.