By This Is Money Reporter
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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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Barclays are the tip of the iceberg. Corporate greed , or as I prefer to call it legalised theft, is now the norm in almost all our big public companies. Shareholders, customers etc should write to the chairman of all these companies expressing their disgust. Also as a conservative supporter I regret that the only way the general public can place any sanctions on these excessive payments is unfortunately thru Higher taxation until we see substantial reductions in Boardroom pay not just restraint on future payments
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So 73% of shareholders voted for insane bonus payments, something like £18 million for one person on the board. Nobody on this planet is worth £18 million per annum, nobody how can shareholders support this insanity? A person winning a multi week rollover jackpot every single year of their lives.
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It is outrageous that the head of Barclays Bank is earning almost as much as Wayne Rooney!
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The financial services industry, particularly banking, is in a very priviledged position in that in this day and age their services are fundamental to the way we live our lives. It is particularly galling that not only do they operate a cartel in excessive charging for these services but they then add insult to injury by rewarding their executives with grotesque and immoral benefits (cash, shares, pensions, etc). One day, unlike today or in the past, we will have a government with a backbone.......
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Owen Sansea, says its all Gordon Brown and Ed Ball who did the damage. Yes everything its al Labours fault, ask him he know everything.
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Am I correct here: is the chairman of Barclays saying we cannot stop paying big bonuses to senior staff because everyone else is doing it? If that's true, then they re all equally culpable for putting the world into the mess it's in
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Sorry, but you can not articulate something that is so shameful.
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