Barclays chairman apologises over bonuses as bosses suffer 27 per cent shareholder rebellion over pay
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UPDATED:
15:01 GMT, 27 April 2012
More than a quarter of Barclays shareholders declined to approve the bank's executive pay despite an apology from its chairman about how bosses communicated the case for high pay deals .
A shareholder vote on executive remuneration today saw 26.9 per cent of shareholders vote against the deal, with 73,1 per cent in favour. Owners of about 63 percent of the bank’s
stock took part.
In another blow, 20.85 per cent of shareholders voted against the
re-election of non-executive director Alison Carnwath, who heads up the
bank's remuneration committee.
Scrutiny: Bob Diamond is facing mounting pressure over his pay
At the start of the bank's annual meeting, Marcus Agius admitted the bank's bosses ‘have not done a good enough job in articulating our case’.
Chief executive Bob Diamond received 17.7million in salary, bonus, benefits and vested long-term share awards last year – despite admitting his bank's performance was ‘unacceptable’.
In front of hundreds of shareholders, Mr Agius's speech was interrupted by occasional heckling and sarcastic laughter.
Addressing anger over pay, he said: ‘There is a significant minority who feel we got some of those judgments wrong in 2011.
‘Evidently we have not done a good
enough job in articulating our case. In some matters we should have
communicated more clearly.’
He added: ‘We recognise the reputational damage that has been caused by the remuneration debate.’
The meeting heard calls for
remuneration committee chairman Alison Carnwath to stand down and for
the 2011 pay report to be thrown out.
Mr Agius, who also faces a significant
vote against his re-election, said: ‘I assure you that in the future we
will be engaging differently and more purposefully with shareholders in
order to ensure that we obtain a broader level of support on
remuneration policy and practice.’
Outside the meeting at Royal Festival
Hall, the bank's bosses had to contend with dozens of protesters from
the World Development Movement and Robin Hood Tax campaign.
The Robin Hood campaigners posed with a giant cheque to represent the implied subsidy provided to banks by the taxpayer.
Diarmaid McDonald, 31, with the Robin
Hood movement, said: ‘We should not be held to ransom by the financial
sector. They are as much part of this society as we are.’
Mr Diamond followed the chairman and started by hailing the bank's first quarter results, published yesterday. The bank recorded a 22 per cent rise in underlying pre-tax profits to 2.4billion, driven by a strong performance at its UK retail arm.
Turning to pay, Mr Diamond said: ‘We recognise the shareholder concerns and we're committed to making further progress.’
In addition, a 5.7million tax
payment made on Mr Diamond's behalf when he moved from the U.S. to London
to take up the role sparked particular anger among investor groups.
The American banker tried to win
support by offering to take half of his 2.7million all-shares bonus
for 2011 if certain performance targets are not met within three years.
Mr Diamond was followed by Ms Carnwath, who introduced herself as ‘the new girl on the block’.
Defending pay, Ms Carnwath said: ‘We reduced awards significantly in 2011.’
In response, one shareholder heckled ‘Not enough’, triggering laughter and applause from the auditorium.
Ms Carnwath went on: ‘We will continue
to seek to push down remuneration levels in the context of the
environment in which we operate.’
Ms Carnwath was met with further taunts, such as ‘Why have you only just woken up to this’
Mr Agius later called for the meeting to be held in a ‘responsible’ and ‘adult’ manner.
Opening the question-and-answer
session with a query about pay, a shareholder asked the board why any
bonus was paid to Mr Diamond at all. Mr Agius said paying no bonus ‘was not an option’ and ‘that was the brutal reality’.
He added: ‘We operate in an international competitive industry. We have to fight for our business every day.
‘It's not an option to pay zero bonus.
We would be so far out of line with our competitors that the commercial
consequences would be dire.’
Jennifer Kramer, a shareholder, also quizzed the board on pay. She said: ‘Do you accept that the problem is with the remuneration and not with how it was communicated’
Mr Agius said: ‘Our intent is quite clear. There are limits on us. We will make sure we engage properly with our shareholders.’
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