When a bank releases its annual report, there is something quietly open that can be seen. The language is always careful, calm, and almost comforting. There are, however, numbers in the middle that tend to make people stop and read again. These numbers are between performance metrics and shareholder notes. This year, that number at Lloyds Banking Group is £17.7 million. That’s how much Charlie Nunn could earn in 2026 if everything goes as planned and shareholders agree with what the bank wants to do.
Twenty-four years ago, Nunn made £6.2 million a year. In 2025, he made £7.4 million. That’s an increase of about 20%, caused by a higher base salary, a bigger annual bonus, and more long-term share awards. Lloyds said that it showed “strong leadership throughout another challenging year for consumers.” It doesn’t matter if you agree with that frame or not; the direction of travel is clear.
The UK got rid of a rule that limited banker bonuses to twice their base salary after the 2008 financial crisis. This is what all of this is happening against the background of. The cap was meant to make people less likely to take risky actions like the ones that brought down the global economy. Some people have always said that it did nothing but force banks to raise base salaries, which limited their options when performance dropped. In the end, the government agreed with the critics because they wanted to keep London competitive after Brexit. In late 2023, regulators got rid of the cap.
Pay at Britain’s biggest banks has changed quickly since then. Barclays raised the most that a chief executive could be paid by 45%, giving CS Venkatakrishnan a package worth up to £15 million for 2025. HSBC told Georges Elhedery that they could pay him up to £15 million. Even though Paul Thwaite of NatWest said in public that senior banking jobs are “very well paid,” he still saw his total pay go up by a third to £6.6 million last year. It looks like Lloyds doesn’t want to be left behind.
Lloyds wants to make a big change for Nunn, not just a number increase. His base pay will be cut by about 44%, and his performance-based pay will go up by a huge amount. The top bonus amount would go from 140% of base salary to 300% of base salary every year, and the top incentive level would go from 300% to 500% over 2 years. He will get £13.9 million if he meets all of his goals. The amount gets close to £17.7 million if the price of Lloyds’ shares goes up another 50%. After seeing that the share price went up about 75% last year, that ceiling doesn’t seem as far-fetched as it did before.
A lot of people can’t help but notice how tense this story is. Lloyds announced another £800 million charge related to the motor finance mis-selling scandal in the same annual report that talked about Nunn’s rising pay. This brings the bank’s total bill for this mess to almost £2 billion. The bank said that that was taken into account when figuring out the annual bonus, which is at least some thing. When regular customers are in the middle of getting their car loans paid off, seeing executive pay packages go up while their claims are still being processed is likely to make them feel bad.
At this year’s AGM, shareholders will vote on the new pay plans. It will be interesting to see how that goes. Some of the biggest asset managers in Britain have already made it clear that they don’t want to just do what other banks do. It remains to be seen if Lloyds’s case—that pay based on performance is better for accountability than high fixed salaries—will be convincing.
It’s more obvious now that the time when bankers didn’t get paid as much after a crisis is over. The banking industry still doesn’t know if what replaces it will lead to better banking or just higher pay for bankers.
