Barclays wins pay vote despite opposition

Barclays is cutting jobs and last year saw profits fall 30%

Barclays shareholders have voted to approve the bank's remuneration package, which includes higher bonuses despite a 30% fall in profits.

Some 34% of shareholders failed to back the report,

Standard Life Investments, a key institutional shareholder, voted against the package.

The BBC's chief economics correspondent Hugh Pym said "there was a significant minority against the remuneration report".

'Active approach'

The vote came against a backdrop of political and public opposition.

Barclays said 24% of shareholders who voted opposed its remuneration report.

When withheld votes were added, the proportion of shareholders failing to back the plan was 34%.

After the decision the Institute of Directors (IoD) said that "Barclay's decision to increase its bonus pool by more than 10% in a year when profits fell by a third, and when bonuses continue to dwarf dividend payouts to shareholders by a factor of three to one, was always going to be a tough sell".

"The significant vote by shareholders against the remuneration report has brought credit to some institutional investors," said Dr Roger Barker, director of corporate governance at the IoD.

"Fund managers like Standard Life have shown a willingness to act as responsible owners. A more active approach to stewardship amongst shareholders is essential if the UK is to sustain its leadership role in corporate governance."

'Competitive pressures'

The bank intends to increase its staff bonus pool by 10% to £2.38bn.

Barclays on Thursday said first quarter profits would be lower this year.

In February, Barclays announced a 30% fall in annual profits and job cuts.

The bank said its cost-cutting programme was starting to show a "material benefit" and would help to offset the downturn in investment banking.

Earlier in the day Alison Kennedy, a governance and stewardship director at Standard Life Investments, said the firm would vote against approving the remuneration report: "We appreciate that there were competitive pressures during 2013 [chiefly in investment banking]... and that the board was seeking to protect a business franchise under threat. "

She said that Standard Life Investments were unconvinced that the amount of the 2013 bonus pool was in the best interests of shareholders, and that they also believe that this decision has had "negative repercussions on the bank's reputation".

European rules

Earlier this week the Business Secretary, Vince Cable, wrote to the UK's top 100 companies warning them to keep a lid on executive pay.

Banks have restrictions on executive bonuses, brought in by the European Union.

They require most of the bonus to be deferred for several years, and part of that to be in shares, which can be taken back if it emerges the company's performance was worse than thought.

The shareholder activist group, Pirc, had recommended that members vote against five resolutions at the meeting, including the remuneration report.