By Margot Patrick
LONDON-- Barclays PLC directors said Thursday that rivals are
picking off the bank's top staff because it can't compete on
pay.
The claim was made at an unruly annual meeting of the bank's
shareholders, during which one of the lender's biggest shareholders
delivered an unusual public reprimand on remuneration.
A representative of Standard Life said the insurer--which holds
a 1.41% stake Barclays according to FactSet--would vote against the
bank's pay report because it is "unconvinced" that the bank acted
in the best interests of shareholders when raised its bonus pool
last year amid a drop in profits.
Barclays Chairman David Walker defended the pay decision, saying
the bank was being "attacked very aggressively by its competitors,"
particularly in the U.S.
Mr. Walker added that Barclays had trouble recruiting staff for
top jobs last year because it pays less than rivals, and that the
number of U.S. senior staff who resigned last year had nearly
doubled.
The comments came as Barclays cautioned Thursday that
first-quarter profit will be lower than in the same period last
year after a "significant" fall in fixed-income trading revenue. It
will report complete first-quarter results on May 6.
Barclays has been under attack from shareholders since releasing
2013 results in February that showed a sharp fall in pretax profit
but a 10% rise in its bonus pool. The bank has a stated aim to
bring down employee pay and give shareholders a greater share of
its profits, but fell short on both counts last year as it tapped
shareholders for GBP5.8 billion ($9.73 billion) in fresh capital to
plug a regulatory hole.
Chief Executive Antony Jenkins told shareholders that he
understands their frustration, but to bear with him as he brings
about major changes at the bank. These include a planned revamp of
its investment bank that will be presented on May 8, and which
executives have said will include significant job cuts.
"I am impatient to deliver the performance and dividend that you
deserve, " he said. "I am impatient to drive forward our cost
target. And I am impatient to see growth across the group."
In what Mr. Jenkins called illustrative of the bank's refocused
approach, Barclays on Tuesday said it is exiting most of its
commodities trading businesses after deciding they weren't making
enough money and didn't fit its strategy.
In comments in a trading update issued before the annual
shareholder meeting on Thursday, Mr. Jenkins attributed the bank's
caution on first-quarter profit to a significant fall in revenue in
its fixed-income, currency and commodities business--traditionally
the main earnings generator in its investment bank. This reflected
"difficult market conditions and a strong comparative performance
for Q1 last year, " he said in the statement.
He added that equities and investment banking was broadly flat
on the first quarter of 2013, and that the fixed-income decline was
partially offset by lower costs as the bank sheds jobs and exits
some businesses.
Barclays reported GBP1.79 billion ($3 billion) in adjusted
profit in the first quarter of 2013, driven by a strong quarter for
its investment bank. Adjusted pretax profit strips out fluctuations
in the value of the bank's own debt and provisions to reimburse
customers for mis-sold products.
A a sharp slowdown across the industry in fixed income trading
started in the second half of last year, though, as bond investors
curbed their activity to get ready for rising interest rates.
Write to Margot Patrick at margot.patrick@wsj.com
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