Lloyds Bids a Long Goodbye to Victor Blank

In the grand scheme of Lloyds Banking Group, a smart West End office for departed chairman Sir Victor Blank doesn't trouble the scorer. Nor is there any reason to query Lloyds' statement that Blank is contractually entitled to this perk for six months after leaving. We could also point out that Blank handed his £213,000 payoff to charity.

But there is a principle here. Why do companies write contracts that allow former directors to enjoy perks at shareholders' expense after they have left?

It doesn't make sense. An office was put at Blank's disposal when he was working for Lloyds and had a use for it – he was carrying out business on the bank's behalf. That ceased to be the case when he departed.

Consider it from the point of view of those Lloyds employees who will lose their jobs: they will be not be able to turn up at the canteen for a subsidized cup of tea after they have said their goodbyes.

Okay, Lloyds may wish to consult Blank from time to time. But, if so, the arrangement ought to be made formal via a consultancy arrangement. That's what happened after Andy Hornby, the old HBOS boss, departed. His £60,000-a-month fee was steep, but at least everybody knew where they stood.

The truth is that, across the corporate landscape, directors have started to think of perks as an entitlement with the same status as a salary. They are different, and companies should recognise that when they agree contracts.