U.K. Financial Investments Ltd., the government arm that manages a 41% stake in Lloyds Banking Group PLC (LYG), said it has voted in favor of the bank's remuneration proposals for executives put forward at Lloyds' annual general meeting Thursday.

The UKFI said Lloyds has made "very significant reforms to remuneration practises at the bank over the last year," in particular introducing "stringent deferral and clawback terms for bonuses."

It said the bank's long-term incentive plan took account of the interests of all shareholders, and didn't encourage excessive risk but provided for future value creation.

The government also voted in favor of the other resolutions proposed at the AGM, including the appointment of board members.

UKFI was similarly supportive of the new executive pay packages brought in by Royal Bank of Scotland PLC (RBS), in which it has an 83% economic stake and 68.4% voted rights. It voted in favor of RBS's remuneration proposals at the bank's AGM April 28.

-By Marietta Cauchi, Dow Jones Newswires; +44 207 842 9241; marietta.cauchi@dowjones.com
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