STANDARD Life has led a revolt over executive pay levels at Barclays Bank, which provoked anger by hiking bonus payments for last year although it suffered a sharp fall in profits.
The Edinburgh-based life and pensions giant voted its near 2% holding against Barclays' Remuneration Report saying the bank's decision to pay out £2.4 billion in bonuses for 2013 - up 10% on the year before despite a one-third drop in profit - had damaged its reputation.
With 24% of votes cast opposing the directors' remuneration report at yesterday's general meeting the ballot revealed deep unhappiness about the pay- outs for last year. Some 1.5 billion votes, representing around 9% of the shares in issue, were withheld.
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Alison Kennedy, a governance and stewardship director at Standard Life Investments, told the meeting in London: "We did not take this decision lightly but, on balance, believe this was the right thing to do."
She added: "We are unconvinced that the amount of the 2013 bonus pool was in the best interests of shareholders, particularly when we consider how the bank's profits are divided amongst employees, shareholders and ongoing investment in the business. The dividend was unchanged in the year and an additional £5.8billion of capital was raised from shareholders." The bank was criticised by a succession of speakers at the meeting where Sir John Sunderland, head of the remuneration committee, was heckled when he said he would have appreciated Standard Life making the point during an earlier consultation process.
One shareholder, Phil Clarke, asked why shareholders were "paying for Manchester United but getting Colchester United".
Mr Clarke questioned whether nearly 500 staff being paid £1 million were worth it - and suggested halving their packages in order to increase dividends by 50%.
Barclays' chairman Sir David Walker told around 840 shareholders at the meeting it needed to raise bonuses to stop an exodus of senior executives. He said Barclays was losing people critical to its development because U.S. rivals are upping pay by at least 15%.
"The challenge was the need for damage limitation and franchise protection," Sir David said.
Barclays won a binding vote on being allowed to pay up to twice the level of employees' salaries as bonuses under new European Union rules that cap pay with the support of 96% of votes cast. Standard Life supported the motion.
Standard Life said it supported the board's intention of reducing the compensation to net income ratio over the medium term but wanted more details.