Barclays was accused of “paying for Manchester United but getting Colchester United” as it faced a backlash from shareholders, including Standard Life Investments (SLI), over rising bonuses and falling profits.
Yesterday’s stormy annual meeting saw 24 per cent of investors vote against the bank’s pay plans, which were also opposed by fund manager F&C.
Barclays also told investors that it expects to see a “small reduction” in adjusted pre-tax profits compared to last year when first-quarter results are published next month.
The group came under fire after announcing a 10 per cent hike in its bonus pool to £2.4 billion, despite suffering a 32 per cent drop in annual profits to £5.2bn.
Chief executive Antony Jenkins will reveal details of his turnaround plan on 8 May, and analysts predict as many as 7,500 jobs could be axed.
Chairman Sir David Walker defended the lender’s pay policy, saying it had to act after facing a drain on investment bankers to US rivals last year.
But shareholders applauded a succession of speakers criticising its plans while Sir John Sunderland, the out-going head of the bank’s remuneration committee, was heckled and SLI said it would not back the pay measures.
Alison Kennedy, governance and stewardship director at the Edinburgh-based fund manager, told the meeting: “We are unconvinced that the amount of the 2013 bonus pool was in the best interests of shareholders.
“The dividend was unchanged in the year and an additional £5.8bn of capital was raised from shareholders. We also believe that this decision has had negative repercussions on the bank’s reputation.”
Sunderland, who is to be replaced by Scottish Enterprise chairman Crawford Gillies as head of Barclays’ remuneration committee, was heckled when he replied that he would have appreciated SLI making the point during an earlier consultation process.
He added: “The easy option would have been to make a non-controversial decision around the bonus pool. There would have been no criticism. But we would have seen a significant further exodus from the investment bank. Instead we chose the difficult option.”
There was more applause when 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.
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.”
Walker, who became Barclays’ chairman in November 2012, later said there had been “just a bit of irritation” that SLI had not expressed its objections earlier, arguing that the bank had consulted “impeccably” on investors’ views.
Eugenia Jackson, head of corporate governance at F&C, said: “We understand the rationale behind the board’s decision to increase the incentive pool in 2013… but cannot support the implementation of the remuneration plan in 2013 because we believe that aggregate rewards to staff were excessive relative to performance.”