It has emerged that Barclay's Chief Executive, Bob Diamond, received an incredible £17.7million in 2011, in spite of admitting that the bank didn't do too well. This sum was made up of his salary, bonus, benefits and long term share awards.
At the latest annual shareholders' meeting anger was sparked by this and a third of the shareholders revolted, refusing to agree to the massive payout. After a lot of shouting and heckling two-thirds of the shareholders voted against it, or withheld their vote. This led to a 24% disapproval of the re-numeration for chairman Alison Carnwath.
Why is this incident important? It sends a clear and hard message to all boards of banks and the financial sector that people have had enough of standing by whilst sky high bonuses are siphoned off. Since the government has promised time and time again to stop such payouts nothing has been done to change anything. In this case it seems the right move for shareholders who have the power to stop the big payouts, to act.
The report states further that the government is considering returning powers to shareholders. They are working on a plan to introduce binding votes on executive salaries.
Previously Mr Diamond tried to get the shareholders to agree to his pay report when he offered to half his £2.7million shares bonus in 2011. However, when the investors found out that a £5.7million tax payment for the move from the United States to London was given to Mr Diamond the investors were furious. It is those sort of situations that are completely out of control. All in all it looks like a turning point has been reached for those incredible bonuses, which are often paid even if the bank is in debt. Hopefully they are coming to an end. HIGH TIME.
Tags: Barclays, banking bonus payments, shareholders, huge bonus payments