A demonstrator wearing
a mask depicting Barclays chief executive Antony Jenkins in the
shareholder queue. Photograph: Suzanne Plunkett/Reuters
Barclays faced a barrage of criticism over its pay policies at an acrimonious annual shareholders' meeting on Thursday, with the board being accused of greed after handing out £2.4bn in bonuses last year.
The bank's chairman, Sir David Walker, tried repeatedly to defend the bonus payouts, which resulted in 481 Barclays' bankers being paid more than £1m last year.
"Why do you think you're worth it?" asked one small shareholder. "It's jam tomorrow for the investors but champagne today for the investment bankers," said another. One was applauded after complaining of management greed.
One in three shareholders failed to support the bank's remuneration report, which showed that bonuses rose 10% despite a 32% fall in profits. Walker had promised a year ago to restrain top pay. One private investor, who expressed his irritation at the bank's dividend payments, poor performance and £5.8bn cash call to bolster its finances last year, told the packed Royal Festival Hall: "We're paying for Manchester United but we are getting Colchester United."
Annual investor meetings are usually dominated by private shareholders who hold small amounts of votes. But one major City investor, Standard Life Investments, which owns almost 2% of Barclays, spoke out to say it had voted against the pay deals. Alison Kennedy, a director at Standard Life Investments, told the board: "We are unconvinced that the amount of the 2013 bonus pool was in the best interests of shareholders, particularly when we consider how the bank's profits are divided amongs employees, shareholders and ongoing investment in the business."
Sir John Sunderland, the independent director who oversees Barclays' pay policies, said it had been forced to increase bonuses because the number of investment bankers quitting to earn more elsewhere had doubled and it had feared an exodus of these key staff.
He appeared to reprimand Kennedy for speaking out in a public meeting rather than raising her concerns during the private consultations that take place with major investors. After the AGM, Walker also admitted to "a bit of irritation" that Standard Life had raised its concerns late in the day.
Sunderland, who has been on the Barclays board for 10 years, maintained that bonuses were down 18% if the penalties imposed for Libor-rigging in the previous year were taken into account. When he asked the meeting: "Do you imagine we want to pay anyone more in this bank more than we need to?" he was met with resounding cries of "yes!".
F&C, another major City investor, later admitted it also did not back the remuneration report. But like the majority, it backed two other votes on pay: a new vote on the bank's pay policy over the next three years and a vote to allow bonuses of twice salary to be paid.
The latter vote was required because of the new EU bonus cap that would otherwise have restricted bonuses to one times salary. However, the bank will continue to make higher payouts than allowed under the new cap because it has introduced new "allowances" on top of pay and bonus payouts.
Boardroom pay was put in back in focus this week by Vince Cable when the business secretary wrote to the pay bosses of big companies to urge restraint.
Barclays was not the only business to face shareholder fury on Thursday. At the pharmaceutical company Astra Zeneca's AGM almost 40% of shareholders voted against the company's pay report.
And at the recruitment company SThree, where the Tory MP Nadhim Zahawi sits on the remuneration committee, just 50.5% voted in favour of its pay policies.
The Barclays chairman repeatedly defended the bank's bonus payouts and said it lost the two co-heads of its US bond-trading desk last year and faced losing two thirds of their team. The bonus payments, he said, were "in the interest of franchise protection and damage limitation".
The 73-year-old chairman – who was parachuted in after the 2012 Libor fine and whose successor is being sought – said the bank had made a mistake in cutting back bonuses too quickly after the interest rate-rigging scandal which forced out his predecessor, Marcus Agius, and the chief executive Bob Diamond.
The scale of the rebellion over pay – which was 34% if votes against and deliberate abstentions are included – was similar to that registered when Diamond was still chief executive.
Private investors stood up to question the bonus payouts at the meeting. "Is Barclays a prisoner to pay to its senior staff?" asked one to applause.
One investor who spoke up in defence of bonuses – the former City fund manager and Conservative party donor Patrick Evershed – was jeered by one of those present, who shouted "call him a taxi".
Walker opened the meeting with a promise not to have a repeat of this year's bonus row. "Your board and I do not intend or expect to face again a similar set of circumstances that led to the very difficult decisions we had to take last year," he said. "The decision on pay this year was among the hardest that we have had to take."
The bank's chairman, Sir David Walker, tried repeatedly to defend the bonus payouts, which resulted in 481 Barclays' bankers being paid more than £1m last year.
"Why do you think you're worth it?" asked one small shareholder. "It's jam tomorrow for the investors but champagne today for the investment bankers," said another. One was applauded after complaining of management greed.
One in three shareholders failed to support the bank's remuneration report, which showed that bonuses rose 10% despite a 32% fall in profits. Walker had promised a year ago to restrain top pay. One private investor, who expressed his irritation at the bank's dividend payments, poor performance and £5.8bn cash call to bolster its finances last year, told the packed Royal Festival Hall: "We're paying for Manchester United but we are getting Colchester United."
Annual investor meetings are usually dominated by private shareholders who hold small amounts of votes. But one major City investor, Standard Life Investments, which owns almost 2% of Barclays, spoke out to say it had voted against the pay deals. Alison Kennedy, a director at Standard Life Investments, told the board: "We are unconvinced that the amount of the 2013 bonus pool was in the best interests of shareholders, particularly when we consider how the bank's profits are divided amongs employees, shareholders and ongoing investment in the business."
Sir John Sunderland, the independent director who oversees Barclays' pay policies, said it had been forced to increase bonuses because the number of investment bankers quitting to earn more elsewhere had doubled and it had feared an exodus of these key staff.
He appeared to reprimand Kennedy for speaking out in a public meeting rather than raising her concerns during the private consultations that take place with major investors. After the AGM, Walker also admitted to "a bit of irritation" that Standard Life had raised its concerns late in the day.
Sunderland, who has been on the Barclays board for 10 years, maintained that bonuses were down 18% if the penalties imposed for Libor-rigging in the previous year were taken into account. When he asked the meeting: "Do you imagine we want to pay anyone more in this bank more than we need to?" he was met with resounding cries of "yes!".
F&C, another major City investor, later admitted it also did not back the remuneration report. But like the majority, it backed two other votes on pay: a new vote on the bank's pay policy over the next three years and a vote to allow bonuses of twice salary to be paid.
The latter vote was required because of the new EU bonus cap that would otherwise have restricted bonuses to one times salary. However, the bank will continue to make higher payouts than allowed under the new cap because it has introduced new "allowances" on top of pay and bonus payouts.
Boardroom pay was put in back in focus this week by Vince Cable when the business secretary wrote to the pay bosses of big companies to urge restraint.
Barclays was not the only business to face shareholder fury on Thursday. At the pharmaceutical company Astra Zeneca's AGM almost 40% of shareholders voted against the company's pay report.
And at the recruitment company SThree, where the Tory MP Nadhim Zahawi sits on the remuneration committee, just 50.5% voted in favour of its pay policies.
The Barclays chairman repeatedly defended the bank's bonus payouts and said it lost the two co-heads of its US bond-trading desk last year and faced losing two thirds of their team. The bonus payments, he said, were "in the interest of franchise protection and damage limitation".
The 73-year-old chairman – who was parachuted in after the 2012 Libor fine and whose successor is being sought – said the bank had made a mistake in cutting back bonuses too quickly after the interest rate-rigging scandal which forced out his predecessor, Marcus Agius, and the chief executive Bob Diamond.
The scale of the rebellion over pay – which was 34% if votes against and deliberate abstentions are included – was similar to that registered when Diamond was still chief executive.
Private investors stood up to question the bonus payouts at the meeting. "Is Barclays a prisoner to pay to its senior staff?" asked one to applause.
One investor who spoke up in defence of bonuses – the former City fund manager and Conservative party donor Patrick Evershed – was jeered by one of those present, who shouted "call him a taxi".
Walker opened the meeting with a promise not to have a repeat of this year's bonus row. "Your board and I do not intend or expect to face again a similar set of circumstances that led to the very difficult decisions we had to take last year," he said. "The decision on pay this year was among the hardest that we have had to take."
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