Top Lloyd's Executives Lose Bonuses Over PPI Scandal, Says PPI Reclaim Company Simple Financial Solutions.

Online, March 9, 2012 (Newswire.com) - Despite the Financial Services Authority introducing new clawback rules in 2009, this is the first time a bank has chosen to exercise that rule. Bowing to public pressure, former chief executive Eric Daniels is set to lose £360,000 off his 2010 £1.45m bonus, while three other former and current directors will lose £250,000. A further six non-board level executives will lose £100,000.

There is no doubt the clawbacks are a direct punishment for the role these executives played in incentivising their staff in such a way that led to rampant and widespread PPI mis-selling. It is likely that other banks will feel the pressure to do the same to their top executives if they haven't already.

Barclays has already indicated that the bonus pool will 'reflect' PPI mis-selling, although Bob Diamond has stopped short of saying the pool will be reduced for those members of staff who have been found to be involved in the scandal. However, the possibility that mis-sold identity theft protection policies sold by CPP to Barclaycard customers could be factored into the bonus calculations has not been ruled out.

Along the same lines, HSBC is trying to overhaul its bonus system using a scorecard approach that assesses executives against financial and non-financial criteria. However, the memory of the thousands of elderly savers who ended up being lured into unsuitable stock market schemes and losing their money will take many years to fade.

A spokesperson for PPI Reclaim Company, Simple Financial Solutions, said: "It's good to see the banks starting to assign responsibility for the PPI mis-selling mess to its executives. There were so many millions of people lied to and cheated out of their money for products which were not suitable for them and would never pay out if they ever needed them to. That's of course the people who knew they had PPI insurance - obviously there are many people who didn't know because it had been hidden in the small print.

"This move towards accountability and fair reward for executive performance will start to help the banks regain some of their trust and credibility with consumers, although it will probably be a long walk back for many banks to get to where they were before the PPI mis-selling scandal broke."

"Now we just have to make sure that the bonus system we build in the future never again rewards people for selling products at any cost."

However, regardless of how bitter top banking executives may feel about the bonus clawback, they should spare a thought for their peers around the globe who are not faring so well. In Spain the government has forced executives in banks that have been bailed out by the tax payer to take a pay cut of up to three quarters of their salaries, while the Netherlands Government is to inflict a retrospective 100% tax on executive bonuses in those banks that took tax payer aid to prop themselves up.

"Considering what is happening to international banking executives in banks that took Government aid, ours should be pretty thankful they're getting so much of their bonuses and salaries left intact," concluded the spokesperson. "It could have been much, much worse."