Barclays defends staff bonuses at heated AGM
Shareholders approve Barclays’ bonus pool package despite heated accusations that the bank is “paying for Manchester United but getting Colchester United”.
Barclays has been accused of “paying for Manchester United but getting Colchester United” during a heated AGM in which one in three failed to back its decision to increase its bonus pool.
Shareholders applauded a succession of speakers criticising its proposed remuneration policy, with one saying it had moved from a culture of “prudence” to “management greed”.
Nonetheless shareholders voted to approve the new renumeration package, which includes higher bonuses despite a 30 per cent fall in profits.
The bank lost the support of City investment funds such as Standard Life, which owns nearly 2 per cent of its share capital but openly denounced the pay policy at the AGM.
Board members including chairman Sir David Walker defended the bonuses, saying Barclays had to act to stem an exodus of top staff to US rivals last year.
Green light given – reluctantly
Voting results from the AGM released following the meeting showed 24 per cent rejected the directors’ remuneration report.
They showed 7.1 million votes cast in favour and 2.2 million against but 1.4 million were withheld – far more than for any other of the AGM resolutions.
It meant 34 per cent either voted against or did not vote for the pay report.
However there was stronger support for other key measures on pay including allowing bonuses of up to twice annual salaries.
‘Management greed’
One shareholder, Phil Clarke, questioned whether nearly 500 staff being paid £1 million were worth it – and suggested halving their packages in order to increase dividends by 50 per cent.
Mr Clarke also described a rights issue to raise cash from shareholders as an “atrocity” and said the performance of Barclays shares suggested the market did not have confidence in the highly-paid employees.
He said: “We are paying for Manchester United but we are getting Colchester United.”
Another investor, Edward O’Toole, said the bank had been “transformed from a traditional culture of banking prudence to one of management greed”.
Alison Kennedy, governance and stewardship director at Standard Life Investments, said as a long-term investor it did not take lightly the decision to vote against the remuneration report, and acknowledged pressure facing the investment bank business.
“Nevertheless, we are unconvinced that the amount of the 2013 bonus pool was in the best interests of shareholders,” she added.
