iNVEZZ.com, Thursday, April 24: Barclays (LON:BARC) has faced fierce criticism at the bank’s annual general meeting (AGM) today. Shareholders voted on the bank’s 2013 bonus pool proposal amid rising anger over its plans to increase staff remuneration by 10 percent to £2.38 billion, despite a drop in profits of over 30 percent and unchanged dividends.
Standard Life, which owns 256 million shares, or a 1.5 percent stake in Barclays, has led shareholder opposition to the move, announcing that it will vote against the plan. The company’s governance and stewardship director, Alison Kennedy, said that the planned bonus increase had not been in the best interest of shareholders and had hurt the Barclays’ reputation.
“We did not take this decision lightly but, on balance, believe this was the right thing to do,” Kennedy told the AGM at London’s Royal Festival Hall.
Shareholder activist group Pirc has recommended that members vote against five resolutions at the meeting, including the remuneration report. Pirc is also against the plan for Barclays’ CEO, Antony Jenkins, to receive up to £1 million in shares as well as his salary and bonuses.
The bank’s pay policy has also been criticised by the Institute of Directors, which noted the bonus pool for 2013 was nearly three times the size of the £859 million allotted as dividends for shareholders.
According to the Financial Times, a sizeable minority of at least a fifth of investors were expected to refuse to back the remuneration report in a non-binding vote, the result of which will be announced later today.
**Chairman defends bonus pool**
Barclays chairman Sir David Walker, due to step down later this year, defended the bank’s bonus pool. “Bonuses up, profits down. Not a headline we would have chosen,” he told today’s meeting. However, Walker remarked that the increase had been necessary to prevent an exodus of key staff at the investment bank.
“Our business was attacked very aggressively by competitors, particularly in the US,” he said, mentioning the example of a US bond trading desk where two-thirds of staff and the two co-heads had threatened to leave. Walker added that the bank was not facing the “same set of circumstances” this year that prompted the raising of bonuses in 2013.
**Barclays share price on the up**
Despite the stormy AGM, ahead of which Barclays warned on profits (Barclays share price: Bank warns of lower Q1 fixed income profit), the bank’s share price has been trading in positive territory so far today. As of 15:12 BST, the stock was 0.44 percent higher at 250.00p.
According to AnalystRatingsNetwork data, one research analyst has a ‘sell’ rating on the FTSE 100-listed bank, 10 have it as a ‘hold’ and 20 rate it as a ‘buy’. The stock’s consensus rating is ‘buy’ with an average price target of 301.88p.
**As of 15:12 BST, buy Barclays shares at 250.10p.**
**As of 15:12 BST, sell Barclays shares at 250.05p.**