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LLOY - Share buyback 2019

lse:lloy

#462

McDonnell was the guy waving his little red book in the House of Commons I think. Full of economic fair-play-for-citizens ideology but little grasp of what would be practical, affordable, acceptable to business and the wealthy, most of his plans would not be allowed under the European regime anyway. Hardly electable, but then nor was Boris!

But I agree that exec rewards can be excessive, AHO is laughing. As a boring bank LLOY share issuance to senior staff is not justified by the risks involved nor the returns generated - so much misconduct and write offs for bad loans etc. And anyway I am not so sure staff in any business should have such large performance incentives. Extreme results-driven rewards are what drives mis-selling and other misbehaviours. Commission salesmen become cowboys.

And then you look at the US owned or global financial institutions compared to domestic ones and there is another order of magnitude of rewards and incentives.

So what can you do … nothing much, just try and keep a lid on it. But LLOY have to stop diluting stock at a rate of 0.5-1% pa. I am sure Bowman will remind us what the issuance has been in recent years, it was discussed in an earlier post but this thread now so large I wouldn’t know where to find it.


#463

Anyone explain why an employee (CEO /Chairman etc ) is given stock to attend a Board meeting ….when he is already paid /annuity/stock bonus & expenses /medical /and transport(or driver driven car) ,etc etc. and Oh yes a salary (Have we forgotten anything?) Yes…and paid annual holiday.
Where does the greed end.?
Salutations


#464

Used to get first pick of the typing pool too.


#465

“McDonnell was the guy waving his little red book in the House of Commons I think. Full of economic fair-play-for-citizens ideology but little grasp of what would be practical, affordable, acceptable to business and the wealthy, most of his plans would not be allowed under the European regime anyway”

I have no time for Corbyn but I think McDonnell is smarter than most give him credit for. He is the one leading the calls in Labour for a second referendum and Labour’s policy to tilt to Remain. He clearly does not believe that the EU would block his plans.

Personally, I would not mind at all if the wealthy squeal a bit about increases in their taxes. Income inequality has gone too far (bankers?) and a bit of levelling out through taxation would be welcome.

Cheers,

Frog in a tree


#466

marktime
The old story
The rich get richer and the poor get children .
Salutations


#467

According to the data I have in my LLOY spreadsheet (derived from the LLOY RNS’s related to Total Voting Rights, the number of new shares issued in the past years was as shown below.

Year New shares issued
2007 9,739,508
2008 325,151,724
2009 57,801,655,867
2010 4,299,617,918
2011 652,497,658
2012 1,616,217,177
2013 1,025,591,652
2014 5,299,416
2017 599,214,232
2018 767,532,349
2019 747,058,196

The large numbers of shares in 2009/2010 were related to the HBOS takeover and the overall financial restructuring that occurred as a result of the HMG stake. 480m of the shares issued in 2012 were Issued in relation to the payment of coupons on certain hybrid capital securities.

The development of the total number of shares in issue is shown in the following chart. As you see that despite new shares being issued in 2018 and 2019 the total number of shares has dropped as a result of the two buybacks, so we are back to 2012 levels.


#468

I re-ran my data extraction, but this time used the data published in each Annual Report from 2007 to 2018. A total of 67,103.5m shares were issued in this period, of which 3,444.8m were issued under employee share schemes. The remaining 63,658.7m were issued for the following groupings.

  1. Capitalisation issue
  2. Issued in relation to the payment of coupons on certain hybrid capital securities
  3. Issued on acquisition of HBOS
  4. Issued on redemption of preference shares and other subordinated liabilities in 2010
  5. Issued to the Lloyds TSB Foundations
  6. Placing and compensatory open offer
  7. Placing and open offer
  8. Private placement of ordinary shares
  9. Redesignation of limited voting ordinary shares
  10. Rights issue

1,577.9m shares were bought back in 2018, and a further 1,886.9m shares were bought back in 2019, making a total of 3,464.8m. This means that the two buybacks have effectively bought back all those shares issued under employee share schemes since the beginning of 2007.


#469

Thank you very much Bowman, awesome and some.

This is rather playing to my suspicions. The buyback sold to us as “shareholders returns” is actually little more than cancelling the effect of transferring shares to staff at our expense, a disguised form of remuneration where bottom line profits are being used in lieu of pay to make topline costs appear lower.

Of course without the buyback things would be worse in the long term. But why are so many new shares being issued to staff (I assume mostly to directors, are they included in your employees?). Don’t answer that, I know all the spin.

After institutions and board execs some senior staff must now be at the top of the “private” shareholders lists thanks to this.

Should probably leave this issue here, I think we now all understand the facts thanks to Bowman.

No doubt in the future it will all fade into the noise when we issue a fresh gazillion of capital to buy Schroders into the Lloyds Banking Group. For example.


#470

The employee figures cover ALL employees, which covers all Directors.

The Annual Report does not cover senior staff holdings specifically. The 2018 Annual Report showed the following Director holdings.

Number of shares Number of Options Total Shareholding
Unvested Unvested
subject to Unvested subject to at
Owned continued subject to continued Vested, 31-Dec
outright employment performance employment unexercised 2018
Executive Directors
António Horta-Osório 25,751,860 1,520,915 17,059,116 36,282 44,368,173
George Culmer 14,754,666 695,245 9,621,899 14,554 25,086,364
Juan Colombás 9,679,888 696,217 9,488,262 29,109 19,893,476
Non-Executive Directors
Lord Blackwell 150,000 150,000
Alan Dickinson 200,000 200,000
Anita Frew 450,000 450,000
Simon Henry 250,000 250,000
Lord Lupton 1,000,000 1,000,000
Deborah McWhinney 250,000 250,000
Nick Prettejohn 69,280 69,280
Sara Weller CBE 340,000 340,000

The Annual Report also contains a summary of shareholdings in LLOY. LLOY have 2,403,545 shareholders, of which 81.3% hold less than 1000 shares. There are 1250 shareholders (0.05%) who own more than 1,000,000 shares, and 180 who own more than 50m shares. Unfortunately there is no breakdown as too how many of the top 1250 are private individuals.


#471

Blimey, Regardless holds more shares than most of the non executive directors. Good lad!

You’ve overtaken Lord Blackwell, next stop Lord Lupton matey:)


#472

So much for ii’s statement that they’ll reinvest any DRIP instructions within 2 business days. My instruction clearly set. Still no DRIP purchase activated. I’d contact them, but with SP closing at 54.12 & a Brexit Deal nowhere near sorted, perhaps they’ve inadvertently done me a favour?

Would be interesting to know if anyone else with ii has found their DRIP instruction not going through?After all, this isn’t a discount broker. What are we paying monthly fees for! - GLA.


#473

Mine not acted on yet Jack. Often takes ii three days. TD was much faster.

Frog in a tree


#474

ii is actioning the LLOY divi reinvestment now!

Frog


#475

Fiat,

Thanks. Indeed, just noted that my available trading cash balance is now minus the LLOY divi amount. So it’ll be an add at 53+. In perspective, since divi paid Friday’s intraday highs were 54.94.

Whilst some will consider 53+ still too high with Brexit uncertainties far from sorted, I feel okay with that. With my highest targets at least 73+, also a L/T resistance level, so maybe even higher intraday, I’ll keep the DRIP active for as long as LLOY is under 60p. Maybe a bit higher.

As mentioned before, I now expect to hold until at least after 2020. No major concerns for longer-term. - Regards.


#476

I have the same strategy Jack. I am banking on no deal being blocked and that a second referendum might be considered as the best way of unblocking Brexit. I think that at worst some deal similar to May’s could be passed.

Frog in a tree


#477

Fiat,

Agreed. In light of much greater knowledge of what Brexit means, its many false promises & lies since exposed, nothing seems more democratic or sensible than a 2nd Vote to break the ongoing impasse.

The charlatan Boris Johnson, increasingly floundering & avoiding closer scrutiny, really hasn’t a leg to stand on with his “do or die” pledge by 31st October. Having foolishly boxed himself into such a tight corner, there’s a good chance that he dies politically speaking: ie. resigns & hopes for a snap GE. He has few other options if he can’t get a new Deal agreed by about the 18th.

But as you say, any Deal can be no more than a slightly tweaked version of May’s rejected Deal. So one wonders if that can ever get majority support in Parliament without strict provisos, such as it being linked to a 2nd Referendum? Otherwise the stalemate seems likely to drag on. - GL.


#478

I don’t think so. I think the EU says goodbye and good riddance November 1st, probably with a large grant for Ireland to help them past the immediate problems.

Mind you, Ireland are fighting in the EU courts right now to NOT receive 13Bn from Apple, so maybe they have more cash than they know what to do with anyway.


#479

@mcgrimes,

A week later I hope the response to our exchange has made you think about diversifying your pension, savings and investments if you are indeed one of those people who work for a company like Lloyds. If you aren’t, then I hope it makes you think more carefully about a person putting all their prosperity eggs in one potentially fragile basket.

I do understand the maths in terms of issuing new shares now Lloyds have got themselves into that position. My argument that they never had any need to remains, especially in the general sense when talking about buybacks by any company, which many of my initial points were about.

I note that a Labour policy is to require 10% of a listed company’s stock to be handed out to the workers. A policy doomed to failure it seems to me. Effectively many people would find 10% grabbed out of their pension scheme and forced into their hands right now. (10% is an interesting figure. A FTSE company board can issue up to 10% of new shares without the need for an EGM and shareholder approval, although I imagine many will de-list given time to do so).

Just one more example of a catastrophe waiting to befall someone with all their eggs tied up with the fortunes of the one company they work for.


#480

Didn’t May’s deal lose by just one vote? I haven’t checked.
But that swing wouldn’t need much tweaking.

My belief is the EU will not agree to anything until after the deadline date. It is only then both sides will blink. No need before as the UK have already agreed to keep the status quo even after a no deal. Why would they.


#481

Hi @swamp_rat

As far as I know, May lost the first vote by 432 to 202. Then the biggest defeat of a government in almost 100 years. The 2nd Vote she lost by 391 to 242. The 3rd Vote lost by 344 to 286. Latter was by far the closest, but still a margin of 58.

You may be right as to timeframe. However, IMO, the EU might well agree to nothing outside of the smallest tweak to what’s already been agreed. Their existential reasons might well trump all other considerations. - Regards.