LONDON – Barclays promised a rigorous review of executive pay on Thursday, as shareholders at the bank's annual meeting said they remain unconvinced that big bonus payouts will be abandoned by its new bosses as part of a new ethical drive.
Chief Executive Antony Jenkins, drafted in last year to tear up Barclays' profits-at-all-costs culture, told shareholders it would take time for them to see the benefits of his multi-billion-pound overhaul.
But evidence of patience was thin on the ground among about 700 shareholders attending the bank's annual meeting in London's Royal Festival Hall.
"'Go-To' bank? Go to hell Barclays. I don't understand why anyone needs 1 million pounds and anyone who asks for more is a greedy bastard. The banks have brought us down, brought the whole economy down," said Joan Woollard, 75, from Lincolnshire, who said she bought five shares to attend the AGM.
Her comments were applauded and echoed by others.
Jennifer Cramer, a small investor, said talk of pay restraint at previous AGMs was shown to be "a sham" when director Alison Carnwath, former head of the bank's remuneration committee, quit last year after disagreeing with the rest of the board on the bonus for Jenkins's predecessor Bob Diamond.
Jenkins has promised to overhaul Barclays' standards and culture to make it the 'Go-To' bank of choice and develop a more open relationship with regulators and customers. Its once venerable brand has been dented by scandals over rate-fixing, product mis-selling and big bonuses and forced Diamond's exit.
Institutional investors are broadly supportive of Jenkins's plans and the bank's pay resolution passed easily at the AGM. The bank said 5.3 percent of shareholders voted against its pay resolution, down from 26.9 percent a year ago.
One of its 20 biggest investors said he had planned to abstain but then opted to back the pay plan as the bank is moving in the right direction.
"If they don't continue to change, we will vote against them ... that sends the right message without encouraging more banker bashing," the investor said.
Jenkins said shareholders would have to wait until 2015 to see a real return from their investment as he closes unprofitable businesses, trims the investment bank and axes thousands of staff.
"We will not achieve a return over the current cost of equity until 2015 and cultural change of the scale we are looking at will take time," he said. "This might not be what people want to hear but it's realistic."
He said after the AGM he understood the frustrations of shareholders at pay, Barclays and the industry.
Shares in Barclays, whose cost of equity is currently 11.5 percent, were down down 0.2 percent at 294 pence by 1555 GMT, adding to a 1 percent fall on Wednesday when the bank said investment banking generated most of its first-quarter profits.
A report commissioned by Barclays and written by veteran lawyer Antony Salz said earlier this month the bank's growth had created a sprawling set of businesses, each with their own culture, and an emphasis on profit, sometimes at all costs.
Salz said pay for the top 70 executives at Barclays was consistently above the average at rivals. The bank has been condemned by politicians for paying 428 of its employees 1 million pounds or more in 2012.
In response to the Salz report, Barclays said pay was being brought down but it was "a multi-year journey." The board and remuneration committee will consider changes "to ensure the rigorous review of remuneration proposals for high earners," it said, and promised more simplicity and transparency for long-term share awards.
Jenkins has pushed out executives associated with the Diamond era, including Rich Ricci, the head of the investment bank, who collected a $26 million bonus last month.
Compensation swallowed 41 percent of the investment bank's income in the first quarter, down from 43 percent a year ago but above Jenkins's target of cutting it to near 35 percent.
Jenkins opted not to take a bonus for 2012. He got a package worth 2.6 million pounds, including shares awarded under a long-term incentive plan. His predecessor, Diamond, took home 17 million pounds in 2011.
Walker refused to join investors who criticised the former American CEO, however. "The contribution Bob Diamond made to the bank was immense," he said, saying the strength of the investment bank he built was shown in the first-quarter results.
But in a nod to criticism that executives or board members did not stand up enough to Diamond, the Barclays report said action would be needed to ensure that "the role of the CEO in encouraging open debate and challenge is fulfilled".
The report also said Barclays aimed to become "a model of constructive engagement with regulators", plans to publish an updated code of conduct and all employees will have to attend a course on the company's new values.
(Additional reporting by Sinead Cruise; Writing by Carmel Crimmins; Editing by Tom Pfeiffer and Greg Mahlich)