Wednesday, 10 May 2017

Barclays endures bruising AGM on pay and Staley whistleblower row



Barclays boss Jes Staley has weathered a bruising shareholder meeting as nearly one in six investors chose not to back his reappointment.
 
Mr Staley faced questions at the bank's annual general meeting over its handling of a whistleblowing case that has landed it in regulatory hot water.


The chief executive won an overwhelming 97% of votes cast at the meeting on whether he should be reappointed to the lender's board.


But there were a large number of abstentions which, when added to votes against, amounted to 16% of investors' share capital failing to back Mr Staley.


Meanwhile after the meeting finished there was another hiccup for the bank when it was revealed that it had agreed to pay $97m to US regulators to settle civil charges that it overcharged clients from its asset management business by tens of millions of dollars.


But it was the chief executive's actions in the whistleblowing case - and top pay levels at the bank - that had dominated the AGM.


He used the start of the meeting, in London, to apologise - again - for the whistleblowing episode, as advisory group Institutional Shareholder Services urged its members to abstain from voting on his re-election.


Mr Staley's efforts to unmask the author of letters, which raised concerns about the recruitment of a member of staff, came to light last month when it was revealed he and the bank were being investigated for breaking City rules on protecting anonymity.


Barclays said, at the time, its chief executive had made an honest mistake but it had decided to impose a pay package cut - which could run to more than £1m - and issue a formal reprimand.


Mr Staley told shareholders on Wednesday: "I made a mistake in becoming involved in an issue which I should have left to the business to deal with."


Under investor questioning, chairman John McFarlane said the bank had seen an increase in the number of whistleblowers coming forward - dismissing suggestions that the case had damaged confidence.
 
 
He also gave his support to Mr Staley in response to a question demanding he quit to save the bank's integrity, saying: "If I believed the CEO should go, I would say so."


He argued Mr Staley was relatively new to the bank at the time but another shareholder was unimpressed with the explanation, saying it "beggars belief" that Mr Staley did not know the rules.


Since the whistleblower episode emerged, it has been reported that private equity firm KKR - a major client of the bank - has blocked Barclays from winning new business with it after Mr Staley intervened in a legal dispute involving KKR and his brother-in-law.


He is under pressure on one further front at the AGM as another advisory group, Pirc, has urged investors to reject the bank's pay report despite supporting his re-election.


It argues that increases in his awards have grown at a faster rate than investor returns and were currently 49 times higher than those of the average Barclays employee.


Votes at the AGM gave overwhelming support to the company's remuneration policy but the ballot did see 14% reject the bank's long-term incentive plan - covering potentially lucrative share awards that benefit senior management.




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