Barclays Plc, Britain’s second-largest bank, moved to appease investor anger over pay by replacing John Sunderland as director responsible for employee compensation.
Crawford Gillies, a director of Standard Life Plc, joins the bank’s compensation committee on May 1 and becomes chairman to oversee pay at a date to be agreed, London-based Barclays said in a statement today. Sunderland is leading the lender’s search to replace Chairman David Walker.
Chief Executive Officer Antony Jenkins, 52, is set to face investors at a meeting on April 24 after the firm dedicated a larger portion of investment-banking revenue to pay employees last year while struggling to make progress on a profitability target. The bank is seeking shareholder backing to award bonuses twice as much as basic pay, as it’s required to do under European Union rules that start this year.
The U.K.’s Local Authority Pension Fund Forum, which advises funds with about 125 billion pounds ($209 billion) of assets, called on shareholders last month to oppose Barclays’s pay plans because of the “awful performance” of its investment bank.
“This is the right thing for the Barclays board to have done,” because Sunderland, 68, “has been central to Barclays getting to where it is today and Barclays epitomizes all that has been wrong with the bonus culture in banking,” Kieran Quinn, chairman of the LAPFF, said in a statement today.
Return on average equity at the securities unit, a measure of profitability, fell to 8.2 percent last year from 13 percent in 2012, below Jenkins’s target of at least 11 percent in 2015. Compensation as a proportion of investment-banking revenue rose to 43.2 percent in 2013 from about 40 percent the previous year. That’s short of the 35 percent target he set for 2015.
Gillies spent more than 20 years with management consulting firm Bain & Co., where he was a managing director from 2001 to 2005, advising firms in the U.K., Europe and North America. At the U.K.’s Department of Trade & Industry, Gillies led the audit and risk committee from 2003 until 2007. He joined the board of Standard Life in 2007 and has chaired its remuneration panel.
“He brings immense experience in a range of different industries, including the financial services sector, in addition to a background in strategy and the public sector,” Walker said in the statement.