The new chairman of Barclays, Sir David Walker, today promised shareholders that he would continue to restrain bankers’ pay and strive to re-establish trust in the bank after it was severely damaged by Libor-rigging and mis-selling scandals.
He told them, as he introduced a substantially changed board of directors, that the bank recognised “unequivocally the need for substantial change — particularly in restoring trust.”
Walker said Barclays was in the process of “fundamentally changing” the way it paid its staff “to ensure that this takes into account how results are delivered as well as what those results are.” He pointed out that total pay and bonuses across the investment bank had fallen 20% last year despite its improved profits. “In Barclays and the wider banking industry, pay became excessive,” Walker declared.
Ahead of the shareholder meeting at the Royal Festival Hall at Southbank, Barclays published its response to the review of the bank’s culture, carried out by lawyer Anthony Salz and published this month.
The review was commissioned in the wake of the departure of former chairman Marcus Agius and ex-chief executive Bob Diamond last summer after the £290 million fines imposed on the bank from regulators on both sides of the Atlantic for its role in rigging the Libor interest rate. Unsurprisingly, Barclays accepted all 34 of Salz’s recommendations.
Walker and chief executive Antony Jenkins said in a joint statement: “This report is our response to those recommendations and strives to outline our approach to implementing each of those in a clear and transparent fashion. The board is committed to implementing all of the recommendations and to publishing an account of our progress in doing so.”
Walker described the Salz report as “inciteful and vigorous” which, in places, made for “uncomfortable reading”.
Outside the annual meeting demonstrators from the World Development Movement staged their usual protest against the bank’s soft-commodities trading and its effect on food prices.
Deborah Doane, director of the movement, said: “Barclays has taken a step in the right direction by pulling out of some forms of food speculation. But its actions are effectively a whitewash.
“It still profits from financial gambling, fuelling food price rises in a world where nearly a billion people go hungry. Only tough regulation and a level playing field can curb speculation and prevent banks from playing havoc with food prices.”
Addressing the broader subject of regulation Walker said that “more intensive and intrusive regulation is here to stay” from both sides of the Atlantic. But he added that Barclays “embraces this”. Yesterday the group reported a 25% drop in first-quarter profits after it spent just more than £500 million of an expected £1 billion on Jenkins’s “Transform” programme which he launched in February.
Unlike last year’s stormy meeting, Barclays shareholders were set to give overwhelming support to the election of the directors and acceptance of the remuneration report.
Last year more than a quarter of the votes went against the pay report.