Proxy shareholder adviser Glass Lewis has urged investors to vote against pay proposals for Barclays’ top executives following a year of scandals that has cost the bank hundreds of millions in fines and settlements.
Barclays was hit with a penalty by regulators in September for accidentally selling $17.7bn of structured financial products it did not have authorisation for. It settled for $361mn with the US Securities and Exchange Commission and set aside £450mn to compensate investors, helping drive down annual net income 19 per cent.
Separately, it also set aside $200mn to settle a US regulatory probe into employees’ unauthorised use of messaging apps WhatsApp and Signal to communicate between themselves and with clients.
As punishment for those and other scandals, the pay of top executives was reduced by a combined £1mn, the bank said in February when it published its full-year results.
Chief executive CS Venkatakrishnan’s bonus was cut by £403,000 and that of finance director Anna Cross by £166,000.
However, Glass Lewis objected to long-term awards close to £3mn that vested last year for former chief financial officer Tushar Morzaria, meaning he was awarded more than two-thirds of his potential pay package.
“We believe shareholders could reasonably have expected the committee to further reduce this award to better reflect the financial and reputational impact of the risk and control issues over the period,” Glass Lewis wrote in a report. Barclays’ annual general meeting will be held in London on May 3.
Morzaria was finance chief for eight years, before retiring in April last year. He is also on the board of BP and Legal & General.
Barclays said: “Considerations and decisions made by the remuneration committee are set out clearly and fully in the 2022 Barclays Annual Report.”
Morzaria did not immediately respond to a request for comment.
The judgment of chair Nigel Higgins has also drawn scrutiny, in light of his decision to stick by former chief executive Jes Staley, despite email evidence of close links between Staley and the deceased sex offender Jeffrey Epstein.
Higgins has subsequently distanced himself from his previous position after a series of revelations in US court cases brought by the US Virgin Islands and Epstein’s victims against JPMorgan Chase, where Staley used to be its top private banking executive.
The cache of emails from Staley’s time at JPMorgan include unexplained references to “Snow White” and “Beauty and the Beast”, while others contain what the US Virgin Islands lawsuit describes as “photos of young women in seductive poses”.
In a letter to shareholders last month, Higgins wrote: “These allegations are serious and new. Barclays itself has received no material new evidence from regulators or law enforcement agencies since Mr Staley left in November 2021.
“The board will also consider further action as appropriate,” he added, reiterating that Staley’s deferred pay remained frozen.