Barclays chairman defends staff bonuses as Standard Life leads shareholder protests
By Steve Slater and Matt Scuffham
LONDON (Reuters) - Barclays (BARC.L: Quote) Chairman David Walker defended pay levels at the bank on Thursday, telling shareholders that it needed to raise bonuses to stop an exodus of senior executives.
Speaking at Barclay's annual general meeting - at which a significant minority of investors led by Standard Life are expected to vote against plans to bump up salaries - Walker said Barclays was losing people critical to its development because U.S. rivals are upping pay by at least 15 percent.
The resignation rate for senior Barclays employees in the United States almost doubled in 2013, he said, and there had been a marked increase in the number of people turning down offers of employment at the bank.
"The challenge was the need for damage limitation and franchise protection... Despite all the reservations that have been expressed, I remain confident in my view that we took the right decision," Walker told around 840 shareholders at the meeting in London on Thursday.
Alison Kennedy, governance & stewardship director at Standard Life, which has a 1.9 percent stake in Barclays, told the meeting the bank's decision to pay out 2.4 billion pounds in bonuses for 2013 - up 10 percent on the year before despite a one-third drop in profit - had damaged its reputation.
"We are unconvinced that the amount of the 2013 bonus pool was in the best interests of shareholders, particularly when we consider how the bank's profits are divided amongst employees, shareholders and ongoing investment in the business," she said.
British Business Secretary Vince Cable this week wrote to banks and other big companies warning them to rein in excessive executive pay or face tighter rules. His said banks, and Barclays in particular, needed to address "dangerous levels" of pay.
However Barclays is expected to easily win a binding vote on being allowed to pay up to twice the level of employees' salaries as bonuses under new European Union rules that cap pay. Continued...