Financial News

  • 15 April 2014, 13:32

Barclays Hires Gillies As New Board Pay Chief

Barclays is to take an important step towards defusing an ongoing pay row with shareholders, with the appointment of a City heavyweight to chair its board remuneration committee.

Sky News has learned Crawford Gillies, who holds directorships at Standard Life, Scottish Enterprise and Mitie Group, will join Barclays' board as a non-executive director in the coming weeks.

Mr Gillies, who will immediately become a member of the bank's remuneration committee, will take over its chairmanship later this year from Sir John Sunderland, sources said.

His appointment is expected to be announced to the stock market on Tuesday, just nine days before a potentially stormy annual meeting at which Barclays is braced for significant opposition over pay and bonuses.

It will follow weeks of recriminations from major Barclays investors, who were infuriated by the bank's decision to increase its bonus pool by 10% to 2.4bn in February despite a slide in pre-tax profits.

The pay hike was described by Barclays' chief executive Antony Jenkins as being necessary to prevent a "death spiral" of defections of leading investment bank employees to rivals.

Shareholders were especially annoyed by the move because the bank was forced to raise almost 6bn through a rights issue last year.

City sources said Barclays' search for a new pay committee chief had been initiated last autumn, with Sir John now entering his tenth year on the board, and that it had taken several months to identify the most appropriate candidate.

A staunch supporter of the lavish pay packages enjoyed by Bob Diamond, Mr Jenkins' predecessor, Sir John will seek re-election at this month's AGM but is expected to retire from the board later this year.

He will continue to oversee the search for Sir David Walker's successor as chairman in the meantime, a City insider said.

Some influential shareholder advisory groups, such as Pirc, have recommended opposing Sir John's re-election, while Glass Lewis, a proxy voting adviser, has urged opposing the non-binding pay report.

Separately, the Association of British Insurers has issued so-called 'amber-top' notices on both the 2013 report and Barclays' future pay policies, which means that shareholders should consider carefully before deciding how to vote.

Barclays hopes that the appointment of Mr Gillies will persuade floating investors that it is serious about reducing pay levels over the long term.

Mr Gillies will assume responsibility for the 2014 remuneration round, which will include role-based allowances for hundreds of Barclays staff as the bank seeks to cope with new European Union pay rules.

Sky News has also learned that Jupiter Asset Management, which holds a small stake in Barclays, is among the institutional shareholders expected to vote against the directors' remuneration report.

Some of these could, however, be persuaded to rethink in the light of Tuesday's news.