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[February 10, 2014]
Barclays Faces New Pay Row Over Remco Chair
(Sky News (UK) Via Acquire Media NewsEdge) Sky News understands that the bank, which was forced to confront damaging revelations about customer data security on Sunday, has asked Sir John Sunderland to stay on beyond the end of his nine-year term in June.
The request risks fuelling controversy over Barclays' pay policies because under UK corporate governance guidelines, non-executive directors are deemed not to be independent if they have served for more than nine years.
Sir John, a former boss of Cadbury Schweppes and the chairman of Merlin Entertainments Group, the visitor attractions operator, is a respected figure in the City.
However, the prospect of him continuing to chair Barclays' remuneration committee, which has triggered several clashes with the bank's investors in recent years, has provoked a hostile reaction from some major shareholders.
"It is not that there is a problem with him individually," one said this weekend.
"The issue is that Barclays cannot claim to be reforming itself while increasing bonuses while revenues stagnate or decline. Having someone in charge of pay who is not seen as independent is a big problem for us." Barclays will confirm on Tuesday that it is paying out roughly £2.4bn in bonuses for 2013, a rise of 10% on the previous year, despite a lacklustre performance in parts of its investment bank.
Sir John has overseen board deliberations over the payments and concluded that they are necessary to prevent defections to rivals on Wall Street.
Antony Jenkins, Barclays' chief executive, is expected to say that the increase in bonuses is an artificial one because payouts were reduced last year as a result of the bank's £290m fine for interest rate-rigging in June 2012.
Mr Jenkins waived his own award of just over £1.5m last week, saying he did not believe it would be right to accept it given the bank's ongoing challenges.
Sir John has only chaired the Barclays remuneration committee for two years, taking over the role from Dame Alison Carnwath, who stepped down from the board in protest at the lavish bonuses awarded to Bob Diamond, Mr Jenkins' predecessor.
Last year, he wrote in Barclays' annual report that his role had been to re calibrate the bank's approach to pay and bonuses.
"I hope that 2012 will be seen as a turning point in the way Barclays approaches remuneration.
"For 2012 and in future we are taking a different approach to the balance between Directors’ and employees’ remuneration, and returns for shareholders.
"We have been justifiably criticised for failures to engage effectively with and explain our decisions to shareholders and the wider public, as well as on some occasions being criticised for the decisions themselves." Sir John could yet decide to stand down from the Barclays board at this year's annual meeting. Alternatively, he could remain as a director but hand over the chairmanship of the remuneration committee to a colleague, one source suggested.
The increase in bonuses for 2013 is likely to provoke further anger this week, particularly in the wake of allegations in the Mail on Sunday about the theft of thousands of Barclays' customer data records.
Barclays said the records related to a part of its business which was no longer operational.
The bank declined to comment on Sir John's future.
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