The vertically driven pendulum is one of the classical systems where parametric instability occurs. We study its behavior with an additional electromagnetic interaction caused by eddy currents in a nearby thick conducting plate that are induced when the bob is a magnetic dipole. The known analytical expressions of the induced electromagnetic force and torque acting on the dipole are valid in the quasistatic limit, i.e., when magnetic diffusivity of the plate is sufficiently high to ensure an equilibrium between magnetic field advection and diffusion. The equation of motion of the vertically driven pendulum is derived assuming that its magnetic dipole moment is aligned with the axis of rotation and that the conducting plate is horizontal. The vertical position of the pendulum remains an equilibrium with the electromagnetic interaction. Conditions for instability of this equilibrium are derived analytically by the harmonic balance method for the subharmonic and harmonic resonances in the limit of weak electromagnetic interaction. The analytical stability boundaries agree with the results of numerical Floquet analysis for these conditions but differ substantially when the electromagnetic interaction is strong. The numerical analysis demonstrates that the area of harmonic instability can become doubly connected. Bifurcation diagrams obtained numerically show the co-existence of stable periodic orbits in such conditions. For moderately strong driving, chaotic motions can be maintained for the subharmonic instability.