Friends defend director at heart of Barclays pay row

FRIENDS of the senior Barclays director responsible for pay awards were last night suggesting that she is being unfairly singled out for the row that has engulfed the bank.

The re-appointment of Alison Carnwath as head of the bank’s remuneration committee is likely to be rejected by up to 15 per cent of shareholders, with some investors blaming the former investment banker for allowing chief executive Bob Diamond and chief financial officer Chris Lucas to receive pay packages that are not sufficiently tied in to financial performance.

But friends said last night that Carnwath, an experienced and well respected director of companies such as Land Securities and Man Group, was being unfairly singled out over the issue, given that Diamond’s package was decided by and signed off by the board’s non-executive directors.

They say that even if she had wanted to, she would not have been able to overturn the pay awards once they had been decided on by the board.

Local authority pension funds and advisory group Pirc have urged shareholders to vote against the bank’s pay awards at its shareholder meeting on Friday.

“The awards for the chief executive are hard to justify given the bank’s poor performance,” said the Local Authority Pension Fund Forum, which is also concerned about the £5.7m “tax equalisation” payment made to offset the tax impact of Diamond’s relocation to Britain.

Ian Greenwood, chairman of the forum, said: “We believe the company needs a clear signal from shareholders that a different approach is required in future.” Threadneedle Investments is also set to vote against the report, despite Barclays last week trying to head off the rebellion by adding a new condition to the bonuses of Diamond and chief financial officer Chris Lucas and saying it would prioritise raising the dividend.

Barclays last week said the “strength of opinion expressed by some shareholders” had led it to alter the structure of payments to Diamond and Lucas. Their bonuses for 2011 are due to pay out in shares over three years, a third in each year. The changes appeased Standard Life but the Association of British Insurers, whose members own a fifth of the FTSE All-Share index, is still unhappy.