Ex-Lloyds CEO Says Bank Can't Win in 2-Million Share Bonus Fight

(Bloomberg) -- Former Lloyds Banking Group Plc Chief Executive Officer Eric Daniels asked a London high court judge to skip a trial and make a so-called summary judgment in his claim for a 2-million share bonus payout against the lender.

Paul Lowenstein, a lawyer for Daniels, told the court that the bonus for the successful integration of HBOS Plc should’ve been made, because the former CEO met objective performance criteria. His lawyers argued that Lloyds’ defense has "no real prospect of success," according to a court filing by the bank’s attorneys. Daniels’ representatives didn’t immediately share their legal statement.

Lloyds is arguing that a trial is necessary in order to debate which rules apply to the bonus, whether and how the shares were vested, and whether the bank’s decision not to pay Daniels was "an unlawful exercise of discretion," according to papers it filed.

HBOS was the subject of one of the most controversial episodes of Britain’s financial crisis that led to a state-brokered takeover by Lloyds in 2009 and a 20.3 billion-pound ($28.5 billion) taxpayer bailout. The bank is being sued by 6,000 retail and institutional investors who say they were duped into supporting the HBOS takeover.

Daniels has also faced criticism for his handling of Lloyds’ mis-selling of insurance products under his leadership. Daniels, who stepped down after a decade as CEO in February 2011, initially filed the case last August, five years after he said he was due the payout. The shares were worth around 730,000 pounds on March 15, 2012, according to Bloomberg data. The shares would be worth 1.4 million pounds based on Friday’s closing share price.

Daniels is joined in his application by Truett Tate, former head of the wholesale banking division, who also sued the London-based bank for 1.4 million shares over the same incentive plan. Representatives for Lloyds, Tate and Daniels all declined to comment on the filings.

The case is: Daniels v. Lloyds Banking Group plc, High Court of Justice, Queens Bench Division, case no. CL-2017-000491

To contact the reporter on this story: Franz Wild in London at fwild@bloomberg.net.

To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net, Christopher Elser, Jon Menon

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