Barclays shrugs off criticism of executive pay

BARCLAYS is relaxed about the row over bonuses for its top executives and would be unfazed if an expected 10 per cent of shareholders vote against its remuneration report, said a source familiar with the bank’s thinking.

The bank has shrugged off criticism amid suggestions that four of its biggest British institutional shareholders could cast their ballots against the pay awarded to top management at Barclays’ annual general meeting at the end of the month.

It is understood that in private meetings with shareholders ahead of the larger gathering, Barclays is keen to emphasise its nine per cent increase in dividend. It also points out that average bonuses fell 26 per cent last year.

Though returns have been a dismal seven per cent – below the cost of capital – the bank argues it is midway through a strategy of ditching or overhauling its failing businesses.

Four major shareholders in the bank – Fidelity, Standard Life, Aviva and Scottish Widows – are said to be planning to vote against the bank’s remuneration report.

And the Pensions and Investors Research Consultants (Pirc), a group that represents institutional shareholders, has recommended that chief executive Bob Diamond should receive no bonus at all for failing to deliver returns.

Pirc also says that investors should vote against the whole annual report, claiming that the accounting standards the bank follows do not give “a true and fair view” of its finances.

SharesSoc, a similar group for individual shareholders, seconded the call to vote against Barclays’ pay practices.

Top ten Barclays shareholders
1. Abu Dhabi Sheikh Khalifa bin Zayed bin Sultan Al Nahyan: 12.4%

2. BlackRock (including funds): 10.9%

3. Qatar Investment Authority: 6.7%

4. Legal & General: 3.9%

5. Scottish Widows: 2.1%

6. Norges Bank: 2.1%

7. Upper Chance Group: 2%

8. Appleby Trust: 2%

9. Fidelity: 1.7%

10. Barclays Personal Investments: 1.6%

As of September 2011