Lloyds stokes fresh controversy over new finance director's pay

Days following the end of the banking results season, Lloyds Banking Group has reignited the banking bosses' payouts controversy by hiring a finance director on a £5.9 million package.

The government-backed bank, which lost £3.5 billion in 2011, has hired  away George Culmer from the insurer Royal & Sun Alliance at an annual salary of £720,000 plus the prospect of an annual bonus of up to £1.44 million. Culmer will also get a further share-based "long-term incentive scheme" bonus of up to £1.62 million.

Culmer would also be getting £1.9 million in shares as a "golden hello" by way of compensation for shares and bonuses he would forego through leaving RSA.

This works out to a total of a maximum of £5.9 million, depending his own and Lloyds' corporate performance.

According to the bank, the metrics used to assess bonuses were "stretching", but they were still a huge upgrade over what Culmer was drawing at RSA.

Apart from the "golden hello", he could expect to make a maximum of £2.4 million at the insurer, as against £4 million at Lloyds, so his new package represented an effective pay rise of 67 per cent.