Barclays chiefs defend pounds 2.8m paid to BZW head

Directors of Barclays, the high street bank, yesterday had to defend against some sharp questions from shareholders at the annual general meeting over the pounds 2.85m paid to Bill Harrison, head of its BZW investment banking business.

"How is Harrison worth pounds 2.85m for three months' work?" asked Robert Muriel to the applause of other shareholders. "Is he going to get pounds 2.85m for every three months he works, plus a long-term bonus package?"

Andrew Buxton, chairman, and Martin Taylor, chief executive, defended the payment by replying that an investment bank had to be run by the best people, and they were expensive. Most of Mr Harrison's 1996 payment was buying out the bonus he would have received from his previous employer, Robert Fleming.

There was also criticism from one shareholder over the recent appearance of Lord Lawson, the former Chancellor of the Exchequer and a director, in television commercials for a competitor, the M&G Group. Lord Lawson narrates and appears in the commercials for M&G's personal equity plans.

Philip Reid, a shareholder, claimed that his work for M&G exposed double standards, in that employees could not make deposits with other banks, yet a director was able to advertise for other financial institutions.

Drawing on a previous statement over the issue, Mr Buxton said he would rather that Lord Lawson had not done the commercials and that he had informed the bank beforehand. He also recommended to the meeting that Lord Lawson should be re-elected to the board because of his value to the bank.

Despite the criticisms, Mr Harrison, who joined the group last October, and Lord Lawson were re-elected to the board. Four other directors, who were also up for re-election, were voted back on to the board.

Barclays shares rose 6.5p to pounds 10.35 yesterday, largely reflecting a reasonably upbeat trading statement by Mr Buxton. He said Barclays had begun the year well, with personal and business banking continuing the strong performance of 1996. He added that provisions in business banking remained at a low level, "a reflection of economic conditions and the prudent management of our book". BZW was having an encouraging first quarter.

Barclays' profits in 1996 increased by 13 per cent, even though BZW's contribution dropped 29 per cent.

Mr Buxton said the bank's branch network remained a key part of strategy for the future, but customers were looking for convenience and choice in how, when and where they could do their banking, through such means as telephone banking and PC banking. The telephone banking service for personal customers, Barclaycall, had 330,000 users and would continue to grow, he added,