Shareholders fuming over Barclays

Of course, without real “say on pay” they can yell as much as they like but they should not expect any change. One would have expected Obama’s economic team to have taken note of the recent UK experiences where public firms thumbed their noses at non-binding votes from investor groups but no, apparently Obama is picking up where Bush left off and ignoring foreign experiences. That might make too much sense. Eventually the US and UK and other developed economies are going to give real voting rights to investors so such abuses can be limited but that will take leadership and vision. Neither is abundant in either Washington or London these days. The Guardian:

Barclays is under fire from several of its big shareholders who are questioning the huge pay-outs to staff at its fund management arm BGI following the sale of the business last week to BlackRock for $13.5bn.

Bob Diamond, BGI’s chairman, is in line for a payout of £22m, while the arm’s chief executive Blake Grossman will collect around £55m under the terms of the deal announced last week.

Speaking anonymously, one institutional shareholder with a £500m investment in Barclays said: “The BGI management incentive scheme is overly generous to staff, and to its senior executives most of all. You could argue that Barclays investors are being shortchanged.”

Several other institutions expressed reservations about “the windfall” for 400 top executives who own roughly a 10% stake in BGI. One said: “Incentives are one thing, but the scale in this instance takes the breath away.”

Senior managers will bank £380m in total with 50 executives taking the lion’s share. Chief operating officer Rich Ricci is looking to make close to £20m.

An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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