Investors are revolting

19 April 2012 By George Hay Follow @gfhay

Barclays is attempting to placate angry shareholders by linking half its CEO’s 2011 bonus to a return on equity target. The concession may help the bank avoid a Citigroup-style revolt. But it begs the question why Diamond’s entire payout isn’t subject to the same condition.

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Barclays has heeded shareholder concern over its executive remuneration by offering concessions over 2011 bonuses awarded to its Chief Executive Bob Diamond and Finance Director Chris Lucas.
Diamond and Lucas have volunteered to attach a further condition to their annual bonuses, the bank said on April 19. Half of the awards, which are all in shares and deferred over three years, will not now pay out until Barclays’ return on equity exceeds its 11.5 percent cost of equity. Barclays’ ROE in 2011 was 6.6 percent.
If Barclays’ ROE can exceed its cost of equity by the end of 2015, the pair can still get their full awards.
Barclays said the move had been prompted by the strength of opinion among investors. Standard Life, one of Barclays’ shareholders, said it would now vote in favour of the remuneration report at Barclays’ annual general meeting on April 27.

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