March 26 (Bloomberg) -- Barclays Plc shareholders should vote against the re-election of the bank’s compensation committee chairman John Sunderland and oppose its pay awards, the U.K.’s Local Authority and Pension Fund Forum said.
“This is a debate about the scale of bonuses at Barclays investment bank given the awful performance of the investment bank,” Kieran Quinn, chairman of the LAPFF, which advises local government funds with about 125 billion pounds ($207 billion) of assets, said in a statement today. “In the year that shareholders had to put in 5.8 billion pounds by way of rights issue, most of that has left the bank in bonuses.”
Sunderland, 68, served on the board when Robert Diamond became chief executive officer as Barclays expanded its investment bank, the LAPFF said. Barclays paid 2013 bonuses valued at three times its dividend, compared with competitor HSBC Holdings Plc whose dividend was two-and-a-half times bonuses, it said. Shareholders are scheduled to vote at the annual meeting on April 24 in London.
Antony Jenkins, 52, who replaced Diamond as CEO in 2012, is struggling to rein in pay and boost profits to help restore investor confidence after the U.K.’s second-largest lender by assets was fined for manipulating interest rates. Jenkins drew criticism last month for increasing the bonus pool amid a decline in investment-banking profit, which he attributed to weak fixed-income markets across the industry. Barclays set aside 2.4 billion pounds for 2013 bonuses, up from 2.17 billion pounds a year earlier.
Barclays asked Sunderland, who has served on the board for about nine years, to stay until the 2015 annual meeting, Chairman David Walker said in the bank’s annual report.
Sunderland said in the the report that the lender’s lack of “pay competitiveness” was starting to damage it outside the U.K.
“The global resignation rate for senior staff in 2013 was significantly above that in 2012,” Sunderland said. “This was particularly marked in the investment bank with a near doubling of resignations of senior staff in the U.S.”
A spokesman for Barclays in London declined to comment.
The investment bank, which represents about 66 percent of group assets, is “such a large part of the Barclays group, it can only be a major contributor to under performance,” the LAPFF said.
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