Banker Bonus: Lloyds CEO Set for Major Pay Rise

Published: 11 January 2026. The English Chronicle Desk. The English Chronicle Online.

Lloyds CEO Charlie Nunn is now at the centre of attention as the UK’s banking sector considers a controversial move that could dramatically boost executive pay. Following the government’s repeal of the banker bonus cap, Nunn could receive a maximum pay package exceeding £13 million, putting him on par with rivals at HSBC, Barclays, and NatWest. Analysts suggest this surge in pay reflects the broader impact of lifted restrictions on performance-related bonuses, which had previously been tightly capped to prevent risky financial behaviour. Lloyds’ upcoming shareholder vote will determine if Nunn’s potential pay increase is approved.

The bank’s remuneration committee has already begun drafting a new three-year executive pay framework. For the first time, Lloyds may fully exploit the post-cap regulatory environment, mirroring other major UK lenders where payouts for top executives have soared. Barclays CEO CS Venkatakrishnan, for example, secured a 45% increase in potential maximum pay last year, allowing him to earn up to £14.3 million if performance targets are met. HSBC also raised CEO Georges Elhedery’s maximum compensation by 43%, potentially taking his package to around £15 million. Meanwhile, NatWest chief Paul Thwaite can now receive £7.7 million for a single year’s work after a similar 43% increase.

If Lloyds mirrors these figures, Charlie Nunn’s maximum package could jump from £9.1 million to £13.2 million. The proposed pay rise will be presented for approval at Lloyds’ annual general meeting this spring. While the potential banker bonus increase is substantial, Lloyds has indicated that Nunn’s fixed salary may be “significantly reduced” to reflect a higher variable reward structure. The aim, the bank says, is to align performance incentives with shareholder interests while remaining compliant with regulatory changes.

The original cap, introduced in 2014, had limited banker bonus to twice a banker’s salary. This measure was intended to curb risky behaviour that contributed to the 2008 financial crisis and to prevent destabilising practices within the financial system. Critics argued, however, that banks circumvented the cap by inflating base salaries, leaving executives still highly incentivised while reducing flexibility in adjusting pay based on annual performance.

Post-Brexit policy shifts played a key role in repealing the cap. Former Chancellor Kwasi Kwarteng advocated for removing the restrictions in 2022, arguing that the UK needed to remain competitive in global financial markets. The regulatory changes, enacted the following year, were aimed at attracting top international talent and encouraging US financial firms to maintain operations in Britain. Lobby groups, including the UK capital markets industry taskforce, supported the move, highlighting that American executives routinely earn far more, with JP Morgan’s Jamie Dimon receiving $39 million last year.

Shareholders have largely welcomed the changes, approving record-breaking pay rises for executives that would have been contentious in the 2010s. While previously, shareholder revolts over excessive pay were common, the post-cap environment now permits significantly higher banker bonuses for senior executives, reflecting global market realities and competitive pressures. Nevertheless, some major UK asset managers have cautioned banks against simply matching competitors’ pay hikes, warning that unchecked increases could raise governance concerns.

Lloyds has stressed that its new pay proposals will be “aligned with market developments and regulatory requirements,” maintaining a balance between performance and reward. A spokesperson emphasised that the forthcoming policy will “appropriately reward delivery of long-term value for customers and shareholders,” signalling a commitment to linking executive compensation, including banker bonuses, with measurable results. Analysts and investors alike will watch closely as the annual reports of NatWest, HSBC, and Barclays are released later this month, which will reveal how the lifted bonus cap has impacted their top executives’ earnings.

The benefits of the removed bonus cap are already evident further down the ranks. At Barclays and HSBC, payouts for top performers, including generous banker bonuses, increased by over 50% in 2024, reaching nearly €20 million for select individuals. One HSBC banker reportedly received between €19 million and €20 million last year, far exceeding the chief executive’s £5.4 million, while Barclays’ top earner earned €17 million–€18 million, surpassing CEO CS Venkatakrishnan’s £10.5 million. These figures underline how the regulatory shift is reshaping compensation dynamics and banker bonus structures across major UK banks.

Critics remain wary that such large pay rises could trigger public backlash, especially in a climate where the cost of living continues to be a pressing concern. Nevertheless, financial analysts argue that competitive remuneration, including attractive banker bonuses, is essential for retaining top talent and ensuring the UK banking sector remains globally attractive. The coming months will reveal whether Lloyds follows its peers in awarding Nunn the record-breaking compensation, potentially setting a new benchmark for executive pay in Britain.

The debate over banker bonuses continues to evoke strong reactions, balancing the need for competitive global pay against public scrutiny and historical caution. As Lloyds finalises its proposals and other banks report results, the broader implications for the UK banking industry, shareholders, and public perception will become increasingly clear, making 2026 a pivotal year for executive compensation in London.

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