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Barclays sees key shareholder vote against pay policy Barclays wins pay vote despite opposition
(about 2 hours later)
Standard Life Investments, a key institutional shareholder, has voted against Barclays' plan to award higher bonuses despite a 30% fall in profits. Barclays shareholders have voted to approve the bank's remuneration package, which includes higher bonuses despite a 30% fall in profits.
Barclays shareholders are voting on the proposals at the bank's annual general meeting amid rising anger over its plans to pay higher bonuses. Some 34% of shareholders failed to back the report,
Despite growing political and public opposition, the bank plans to increase its staff bonus pool by 10% to £2.38bn. 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".
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%.
'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.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.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.The bank said its cost-cutting programme was starting to show a "material benefit" and would help to offset the downturn in investment banking.
The issue of bonuses is dominating the meeting at London's Royal Festival Hall. 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. "
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".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".
Pay restrictions European rules
Barclays said its investment bank's fixed-income operations had seen a "significant" reduction in income compared with a year earlier.
The results are due on 6 May.
Tougher regulations have made investment banking less profitable, and Barclays' competitors are also seeing income fall from their divisions.
Also on Thursday, the Financial Reporting Council said all companies, not just banks, should be able to claw back bonuses if targets are missed.
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.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. Banks have restrictions on executive bonuses, brought in by the European Union.
Criticism 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, has recommended that members vote against five resolutions at the meeting, including the remuneration report. The shareholder activist group, Pirc, had recommended that members vote against five resolutions at the meeting, including the remuneration report.
Pirc is also against the plan for Barclays' chief executive, Antony Jenkins, to receive up to £1m in shares as well as his salary and bonuses.
The bank's pay policy has also been criticised by the Institute of Directors, which pointed out the 2013 bonus pool for 2013 was nearly three times the size of the £859m allotted as dividends for shareholders.
The bank argues that these levels of pay are necessary in order to keep the best people working for it.