London - AFP
Some of the world\'s biggest banks face increased pressure from institutional shareholders to curb the pay and bonuses of top executives amid severe under-performance following the financial crisis. Barclays chief executive Bob Diamond has moved to quell a shareholder revolt at its annual general meeting on Friday by offering to change the terms of his latest annual bonus worth £2.7 million (3.3 million euros, $4.3 billion). Diamond and group finance director Chris Lucas last Thursday agreed not to receive half of their all-shares bonus award for 2011 if certain performance targets were not met within three years. Also last week, shareholders in US bank Citigroup refused to endorse a pay plan for chief executive Vikram Pandit and four other officials, dealing a blow to a management that has failed to lift the bank\'s value in recent years. \"This whole emotive issue seems to have moved on from public outcry to shareholder pressure on both sides of the (Atlantic),\" Richard J Hunter, head of equities at Hargreaves Lansdown Stockbrokers, told AFP. \"The latest development from Barclays is another acknowledgement from the banks that remuneration is to be more closely correlated to overall group profitability.\" Citigroup shareholders rejected the board\'s compensation plan for the top five executives, which included a $14.9 million (11.3 million euros) package for Pandit for 2011, after he kept his salary in 2010 at just $1.00. Pandit is under pressure, with the bank\'s shares stuck below $40 since August compared to the $500-plus level it achieved before the financial crisis struck in 2007. Barclays\' performance is also failing to satisfy its major shareholders. Feeling the heat ahead of its annual general meeting, the bank said it is \"fully committed to ensuring that a greater proportion of income and profits flow to shareholders, notwithstanding that it operates within the constraints of a competitive market.\" Shareholder rebellion over Barclays\' executive pay intensified in early April after leading investor group, Pensions & Investment Research Consultants (Pirc), said Diamond should not receive \"any bonus at all.\" Pirc advised its members to vote against the bank\'s remuneration report at Friday\'s meeting. But another key shareholder, financial group Standard Life, welcomed last week\'s move by Diamond and said it would back the bank\'s plan. \"We are pleased that our key concerns over last year\'s executive bonuses have been addressed,\" said Standard Life\'s global head of governance and stewardship Guy Jubb. \"The decisions demonstrate that robust stewardship engagement by long-term institutional investors does work, especially when it is undertaken in a \'comply or explain\' governance environment.\" Barclays said last Thursday that Diamond and Lucas had \"volunteered\" to subject their bonuses to new conditions in recognition of the \"strength of opinion expressed by some shareholders.\"