Barclays and Lloyds Banking Group revealed plans to pay their bosses nearly £1 million in share allowances each on top of salary and bonuses to defy new European rules to cap payouts.
Annual reports from the two banking giants showed Antony Jenkins, chief executive at Barclays, will be paid £950,000 over 2014 in quarterly instalments, while taxpayer-backed lender Lloyds said it will hand boss Antonio Horta-Osorio £900,000 in shares.
The allowances are designed to allow the banks to get around the EU bonus cap, which came into force on January 1 limiting annual payouts for 2014 onwards to 100% of annual salary, or a maximum of 200% with shareholder approval.
HSBC's annual report last week unveiled plans to offer boss Stuart Gulliver £1.7 million in fixed pay allowance to be awarded in shares on a quarterly basis, on top of his £1.25 million salary.
Barclays has already said it will ask shareholders to back payments up to 200% of salary, while also introducing its new role-based pay awards that mean staff can still pick up bumper handouts.
Today's admission from taxpayer-backed Lloyds marks the first time it has confirmed it will also ask shareholders - including the Government - to back the maximum payout allowable under the rules.
And despite calls for pay restraint, more staff at both banks earned over £1 million last year.
There were 481 staff in the millionaires club at Barclays, up from 428 in 2012, while Lloyds handed 27 employees more than one million euros (£821,000), up from 25 in 2012.
Recent full-year figures also showed that annual bonus handouts for 2013 were also increased at both banks.
Mr Jenkins sought to defend his decision to increase bonuses by 10% to £2.4 billion despite posting a 32% drop in underlying annual profits to £5.2 billion.
He told The Daily Telegraph he was attempting to avoid a "death spiral" after an increase in the number of staff leaving.
He is in line for a potential £6.3 million package this year, including the new quarterly allowance, although the bank said this was around 15% less than the maximum payout under the previous pay structure.
Mr Jenkins was paid £1.6 million in 2013 after waiving an annual bonus and receiving no long term incentive shares.
His counterpart at Royal Bank of Scotland, Ross McEwan, has also forgone any annual bonus.
But Mr Horta-Osorio refused to pass up his entitlement to a £1.7 million deferred shares bonus for 2013, which took his total package to £4.6 million, including his £1.1 million base salary, a £1.1 million shares long-term incentive payout and more than £680,000 in pensions benefits.
He could pick up a possible £7.8 million in total pay for 2014, if the maximum long-term incentive payout of 300% of salary is awarded.
On unveiling annual results last month, Mr Horta-Osorio said his bonus and a £395 million payout to staff was justified after Lloyds returned to bottom line profit for the first time in three years.
He claimed it was now a "normal bank" after posting statutory profits of £415 million against losses of £606 million in 2012 - its first bottom line profit since 2010.
Lloyds said its remuneration committee "strongly believes in pay for performance, in providing a competitive package that allows us to attract and retain the key talent necessary to deliver the strategy set by the board, and in ensuring that fixed costs are properly managed".
But its plans to defy the bonus cap are controversial, given its status as a part-nationalised bank and in light of its mammoth bill for the payment protection insurance (PPI) scandal and recent record £28 million fine for handing sales staff "champagne bonuses" that encouraged mis-selling.
It is thought that Lloyds is clawing back the remaining bonus handed out to former chief executive Eric Daniels for 2010 as a result of its PPI compensation bill, which has now hit nearly £10 billion after another £3.1 billion was set aside for 2013 alone.
The bank has already recouped around 80% of the £1.45 million 2010 deferred bonus that was earmarked for Mr Daniels and is now expected to claw back the remaining 20%.
Helen Weir - the former Lloyds head of retail banking at Lloyds - is also among those said to be in line for further clawback after she was paid £875,000 in deferred shares for 2010.
Lloyds declined to comment on the clawback plans, saying only in the annual report that its remuneration committee had recommended the board "should exercise its discretion to adjust the value of certain 2010 and 2011 bonus awards, on a basis equivalent to that applied in the previous year".
The Bank of England said yesterday it was consulting on plans to go even further with bonus clawback, with aims to give firms the power to recoup bonuses that had already been paid to staff in time for the 2014/15 bonus round.
The level of pay in the banking industry for 2013 and plans to avoid the EU bonus cap have fuelled public and political anger in recent weeks.
Andrew Tyrie, chairman of the Treasury Select Committee, said: "It is regrettable that a number of banks appear not to have accepted the need for fundamental reform in this year's bonus round.
"The new consensus emerging on pay remains seriously flawed. It will now be up to regulators to do the job."
Lloyds said the new fixed annual allowances will be paid solely in shares and will be released over a period of five years, while Barclays will also defer its role based pay awards for up to five years.
Barclays said it expects between 1,100 and 1,400 so-called code staff to come under the scope of the EU bonus cap rules this year.
It said its remuneration committee was focused on setting pay a t levels required to "attract, retain and motivate our people".
The group added that it also reduced its potential 2013 bonus pot by £114 million to take account of PPI and interest rate swap mis-selling, while clawing back £176 million from long-term incentive awards made in previous years that were due to vest in 2013.