Barclays bosses’ bonus bombshell

Nearly one third of shareholders today rejected Barclays’ proposed remuneration package in one of the largest revolts of recent times.

by Michael Northcott
Last Updated: 19 Aug 2013

Senior Barclays executives including the chairman were heckled today as they took to the stage to give speeches at the AGM, shortly before a sizeable group of shareholders voted against the proposed remuneration package for the bank’s senior staff. 

Chairman Marcus Agius was jeered and laughed at as he delivered a speech ‘apologising’ for not listening to angry shareholders in 2011. Hours later, 26.9% of shareholders voted against the proposed executive pay package, confirming the fears of management that pay and bonuses might have to be curtailed. Shareholders were literally laughing all the way to the bank.

Many are angry that CEO Bob Diamond stands to receive an increased salary (around £17m when all the perks are included) despite the bank’s lacklustre performance and the falling share price. Diamond earned a £1.35m salary and a £2.7m bonus for 2011, criticised at the time as being too large a salary for the boss of an under-performing bank. It seems Diamond may be losing his sparkle…

There has developed an executive pay fever on both sides of the pond in recent months, with the US’s Citigroup suffering a similar revolt just weeks ago. Earlier last week, Barclays tried to head off disgruntled investors by deferring a portion of Diamond’s bonus payout for last year. It doesn’t seem to have worked.

Return on equity for shareholders last year was stuck at a puny 6.6%, which falls way short of the bank's own target of 13%. In addition, the size of the bonus pool outweighed the dividend by the best part of £1bn. Diamond and his pals are now under pressure to curb their enthusiasm, but it is worth noting that the package did actually pass. Just not with the same acquiescence as usual.

In total, 838 shareholders attended the meeting, almost 100 more than last year. We can’t imagine it’s much fun giving a speech to a roomful of people where at least 250 are really, really angry with you. But Diamond is getting increasingly familiar with it…

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