Shareholders at Barclays have reacted angrily to the pay-packets of top earners at the bank after being told that it would be two more years before they could expect to see a decent return on their investment.
Chief executive Antony Jenkins told investors at Barclays’ AGM that the bank did not expect to generate profitable returns on equity until at least 2015.
The cost of streamlining the investment bank had already cost over £500 million, he said, as he defended his move to streamline the division that became involved in numerous scandals under previous incumbent Bob Diamond (read more).
Severance packages for staff include vast rewards for outbound chiefs Rich Ricci and Tom Kalaris, with total expenditure for the restructuring process expected to reach £1 billion this year.
Shareholders at Barclays were angry to learn that the cost of the clean-up operation instigated by Antony Jenkins (above) would damage their dividends until at least 2015.
“Greedy Bastards”
But board members were unimpressed by the vast sums awarded to the bank’s top brass. They took umbrage with the pay-off granted to Mr Diamond, who left the bank under a cloud of controversy last year after the bank's involvement in the Libor scandal emerged.
Board members highlighted the statement made by Alison Carnwath, former chair of the board’s remuneration committee, who had been the sole opponent to Diamond receiving a full bonus of £2.5 million for 2011 (read more).
Ms Carnwath said that directors were generally worried about withholding any of Mr. Diamond’s entitlement, despite the bank’s lacklustre performance.
Barclays chairman, Sir David Walker (right), faces a grilling in February for supporting the bank's head of remuneration (read more).
Shareholders found a measure of support from the bank’s chairman, Sir David Walker, who admitted that he sympathised with their more belligerent remarks.
But he faced criticism in February from the Parliamentary Committee for Banking Standards for supporting remuneration chairman Sir John Sunderland (read more). Sunderland had told the panel that no mistakes were made regarding the pay recommendations for Bob Diamond, despite the damaging scandals that took place under his leadership.
Barclays said it would continue to recalibrate its pay structure to reward service rather than profits following two separate reports that condemned the “revenue-at-all-costs” culture that existed under Diamond’s leadership.
Keith McDonald
Which4U Editor
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