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Lloyds profits down but CEO's pay is hiked to £8.5m

By Holly Williams

Lloyds Banking Group has revealed an £8.5m pay package for its boss and handed out a special dividend payment to shareholders despite seeing profits fall after more mis-selling charges.

The high street lender awarded chief executive Antonio Horta-Osorio a deferred annual bonus of 723,977 shares and hiked his salary by 6% to £1.13m.

His pay details were revealed alongside annual results showing bottom-line pre-tax profits fell 7% to £1.64bn in 2015 from £1.76bn in 2014 after taking another £2.1bn hit for payment protection insurance (PPI) mis-selling.

Lloyds said the extra charge for PPI in the fourth quarter took its total for the scandal last year to £4bn.

But it said stripping out PPI and other one-off costs, underlying profits rose 5% to £8.1bn.

Shares in Lloyds surged as much as 10% after it announced a 2.25p dividend per share and a 0.5p special dividend in a total payout worth £2bn.

It marks the latest sign of its recovery, after resuming dividends last year for the first time since its taxpayer rescue in 2008.

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