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Britain's state-rescued Lloyds Banking Group announced Monday that its chief executive Eric Daniels would not take his annual bonus of 2.3 million pounds (2.6 million euros, 3.6 million dollars).
The group, which is 43-percent state owned after being bailed out with billions of pounds, revealed the news in a statement amid intense media speculation on the issue before LBG's 2009 results on Friday.
Lloyds' remuneration committee decided to award Daniels his full annual bonus but he waived it for the second year in a row, said the statement from Chairman Sir Win Bischoff.
"Mr Daniels has taken this action because he believes that the excellent progress the group is making ... is in danger of being obscured by the current debate on executive bonus awards in the banking sector," Bischoff said.
The news comes after Barclays bank last week announced that its top executives had shunned their latest annual bonuses amid growing public outrage over pay.
The Financial Times meanwhile reported Monday that the boss of the Royal Bank of Scotland -- which is also state-rescued -- would refuse his 2009 bonus.
RBS chief executive Stephen Hester will waive his right to a possible 1.6 million pounds (1.8 million euros, 2.5 million dollars), the bank is set to disclose on Thursday when it will also unveil its annual results.
"He will do whatever is necessary to secure the future of the bank," the FT quoted one person close to Hester as saying. RBS is 84-percent owned by the British government after a series of enormous state bailouts.
There is widespread public anger about the banking sector's bonus culture, which some observers blame for encouraging excessive risk-taking and helping to tip the world economy into recession.
"2009 was a challenging year for the UK economy, our group and many of our customers," added Lloyds Chairman Bischoff on Monday.
"We have 30 million customers and can therefore understand the financial hardships that many households and businesses are experiencing across the UK arising from the decline in the economy last year.
"We are, of course, mindful of the ongoing public debate on the issue of bonuses in the banking sector.
"We believe that it is appropriate that our colleagues receive appropriate financial recognition when our stretching performance targets, which include both financial and non financial measures, are met.
"In our case, as a retail and commercial bank, our overall allocation under the annual bonus schemes represents a very small percentage of revenues."
Bischoff said that within the group as a whole, annual bonuses would be paid in shares and would be subject to deferrals and "clawbacks" in line with principles worked out by the Group of 20 nations.
