Barclays Plc shareholders should oppose the lender’s compensation report as executives’ long-term bonuses remain “high,” Pensions & Investment Research Consultants Ltd. said.
Shareholders should also vote against its annual report at its meeting on April 25 because the bank’s reliance on International Financial Reporting Standards may have meant it overstated profits by about 11.7 billion pounds ($17.9 billion), the London-based investment adviser said in a report today. The accounting rules restrict provisioning against expected loan losses, it said.
Antony Jenkins, 51, who replaced Robert Diamond as chief executive officer in August, is seeking to rein in pay and boost profits to help restore investor confidence in the wake of the Libor scandal at the U.K.’s second-largest lender by assets. The London-based bank plans to eliminate some 3,700 jobs this year after posting an annual loss of 1.7 billion pounds for 2012.
“IFRS profits may be unreliable, illusory and leaving out losses,” PIRC said in the report.
A spokesman for Barclays declined to comment.
Barclays paid investment bankers bonuses that were “incapable of justification” as employees focused on revenue at the expense of clients, according to an internal report published last week.
In the report commissioned by the bank after it was fined 290 million pounds for manipulating the London interbank offered rate in June, Rothschild Vice Chairman Anthony Salz criticized the lender for failings in its culture and urged it to improve its openness and transparency.
PIRC also recommended shareholders oppose the re-election of John Sunderland as a member of the board. The Barclays executive told a parliamentary commission that it was right for Diamond to receive a bonus for 2011 in recognition for his work.
PIRC advises clients who manage more than $2 trillion in pension funds.
-- Editor: Jon Menon