- Charlie Nunn saw his pay slashed last year because of bonus calculation
- Lloyds ordered staff last April to be in office at least two days each week
In a bold, pro-active move, Lloyds chief executive Charlie Nunn ordered his staff to return to the office after working from home since the pandemic.
But the boss of one of Britain’s biggest banks paid the price for his tough stance when his disgruntled employees effectively forced a pay cut on their CEO.
Mr Nunn earned nearly £90,000 less than the year before because a measure of ’employee engagement’ that is used to calculate his bonus fell short at the end of 2023, reflecting workers’ unhappiness at being hauled back to the office at least two days a week.
Mr Nunn still received an overall pay package of £3.7million, but the sum was 2 per cent lower than in 2022, despite annual profits surging by 57 per cent to £7.5 billion.
The bank’s annual report, published last week, said: ‘Our 2023 employee engagement index score is reflective of some necessary but tough changes in the operation of flexible working. Not all colleagues welcomed the changes.’
The fact that workers opposed to returning to the office have managed to take a slice out of their boss’s pay has raised eyebrows.
Former Conservative leader Iain Duncan Smith said: ‘He did the right thing telling them to get back to work, but some of these guys got used to staying at home.
‘Maybe the best thing he can do is to sack the lot of them and get some people who are more loyal who could do the hard work.’
The ‘pay cut’ is the latest episode in the battle by bosses to return to pre-pandemic ways of working. Business leaders and MPs argue it is vital to reviving productivity as well as boosting Britain’s town and city centres.
But Lloyds’ order to staff last April that they must be in the office at least two days a week sparked fury. At its annual general meeting in May, the bank’s board was accused by one member of trade union Unite of ‘an attack on flexible working’.
According to the Financial Times, Mr Nunn told a staff briefing: ‘We can only [be competitive] if we collaborate effectively… which is difficult if a team are below strength on certain days, or if some key people are only available at times when the majority are not.’
But continuing staff disgruntlement had an effect on the annual tally used to set Mr Nunn’s bonus – up to a maximum of £1.59 million.
The ‘scorecard’, which looks at various performance measures, ended up awarding him 80.3 per cent of that figure, or £1.28million. That was down from 84.1 per cent, or £1.34million a year earlier.
‘Culture and colleague engagement’ is one of the measures used to calculate the total. The low score by staff for 2023 resulted in zero being added to the payout. J
John Longworth, the former British Chambers of Commerce boss who now chairs the Independent Business Network of family businesses, questioned the way pay is calculated.
He said: ‘The alignment of objectives is out of whack at the moment because of the pursuit of woke and home working. Businesses need to focus on productivity, growth and profit.’
Charlie Mullins, founder of Pimlico Plumbers, said Mr Nunn should be paid more for trying to bring people back to the office. ‘How can you penalise somebody for doing their job correctly?’ he said.
Yesterday, Ged Nichols, general secretary of trade union Accord, which represents Lloyds staff, said the fallout was no longer a ‘major issue’. He added: ‘We don’t take any satisfaction at the fact that his remuneration was reduced as a consequence.
‘But we do think that the group could have consulted with the union earlier and better.
‘They made a decision with the best intentions, but didn’t communicate it well. That’s been reflected in his bonus, which is fair enough.’
Yesterday, Lloyds said in a statement: ‘Our 2023 employee engagement score was impacted by decisions that were necessary as part of the continued transformation of the group, including further improvements to flexible working arrangements.
‘Employee engagement is an important part of our executive scorecard and bonus outcomes reflect this.’
Robert Johnson is a UK-based business writer specializing in finance and entrepreneurship. With an eye for market trends and a keen interest in the corporate world, he offers readers valuable insights into business developments.
