Remuneration at Barclays and Persimmon

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Barclays Bank Annual General Meeting is due next week on the 24th April. Pay of bankers is always controversial and Barclays is no exception. Pay has been going up but performance has gone down, and a rights issue is required to strengthen the company’s balance sheet. The CEO, Antony Jenkins, has waived his bonus for last year, but that has not placated investors. The bonus pool has been increased and “Role Based Pay” introduced to avoid restrictions imposed by the new CRD regulations.

In addition a new “Remuneration Review Panel” has been introduced, and the ratio of variable to fixed remuneration for “Code” staff (i.e. senior managers) is proposed to go up from a maximum of 100% to 200%.

A new director and prospective head of the Remuneration Committee, Crawford Gillies, was announced on the 15th April. This simply looks like another attempt to head off complaints at the forthcoming AGM.

Institutional investor advisor PIRC has recommended voting against both the Remuneration Report and the Remuneration Policy, against the change for Code staff and against the re-election of Sir John Sunderland – the outgoing Remuneration Committee Chairman.

They also recommend voting against Mike Ashley as a non-executive director because he is a former KPMG partner and allegedly involved in aggressive accounting standards. To quote PIRC:  “This is particularly relevant given that aggressive accounting techniques have been associated with high levels of executive pay, which the Barclays Board does not appear to have mitigated“.

PIRC even suggests voting against the Annual Report & Accounts because there is no vote on the dividend. It’s normal practice to have such a Resolution and not many shareholders ever vote against it, but this writer sometimes does so. For example, paying out a dividend when the company is having to raise capital from shareholders to improve its balance sheet might be seen as illogical.

Shareholders in Barclays may surely be wise to follow PIRC’s lead on these issues if you are attending the AGM or have not yet submitted your proxy vote.


Housebuilders Persimmon held their AGM yesterday. There were significant votes against their remuneration last year due to concerns about the bonus scheme, but this year there were only 9% of proxy votes against the Remuneration Policy and even less against the Remuneration Report. With about 100 shareholders present, only one person put their hand up against these votes after the Chairman explained that there had been some misunderstanding over the bonus scheme. With housebuilders doing financially very well at present, opposition was almost bound to be muted. But Barclays may be a different case altogether.

Roger Lawson

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