As some Barclays shareholders refuse to back pay packages for top executives, Business Secretary Vince Cable tells Channel 4 News he welcomes the move.
A total of 32 per cent of shareholder votes failed to support Barclays’ remuneration report at the bank’s annual general meeting. In their sights was chief executive Bob Diamond, who earned more than £20m last year.
Asked by Channel 4 News if Mr Diamond earned too much, Mr Cable said: “I don’t know whether he does or not. I think that’s a matter for Barclays shareholders and they have made their views very clear, or a lot of them have.
“It’s their duty to signal their discontent, which is what they’ve done and which I welcome, because it is the responsibility of shareholders to deal with excessive pay.”
Chairman Marcus Agius, who was heckled, apologised to shareholders and admitted that senior Barclays staff “have not done a good enough job in articulating our case”.
He said: “On some matters we should have communicated earlier and more clearly. For this I apologise, and I assure you that in the future we will be engaging differently and more purposefully with shareholders in order to ensure we obtain a broader level of support on remuneration policy and practice.”
The meeting voted on the £20m remuneration package that Barclays awarded Mr Diamond last year. Although a rebellion by shareholders is embarrassing for the bank, it does not necessarily mean the package will be significantly changed. Mr Diamond’s pay included a £11.8m bonus and long-term incentive award.
PIRC, an advisory body to institutional investors, told Channel 4 News it is unhappy with the package and also wants to know why Barclays is paying Mr Diamond compensation (a so-called “tax-equalisation” payment) of £5.75m for a tax bill he incurred following his move to London from the US.
PIRC said: “In view of the fact that Barclays’ shares are trading far below net asset value, we cannot think of any circumstances in which a chief executive who was part of a team when the bank got into that predicament should be receiving any bonus at all.”
It also complained that the remuneration structure for executives such as Mr Diamond “remains complex”.
Mr Diamond’s pay was not as high as first planned, however. Barclays, under pressure from its large institutional shareholders to curb pay, did make some concessions to put conditions on Mr Diamond’s pay.
Barclays announced that Mr Diamond would only receive half of his shareholding bonus automatically, with the rest hinging on further conditions linked to his performance. Chris Lucas, the bank’s finance director, has also pledged to give up 50 per cent of his deferred bonus of £1.8m.
Standard Life told the Financial Times: “We are pleased that our key concerns over last year’s executive bonuses have been addressed.”
In February after posting a 3 per cent fall in profits Barclays slashed the bonus pool for its investment banking arm following public anger over bonuses which saw LloydsTSB boss Antonio Horta-Osario waive his bonus and RBS’ Stephen Hester turn down his almost £1m payout.
In the US, more than half of Citibank shareholders refused to back a $15m package for its chief executive Vikram Pandit.