Barclays pledges higher returns as bonuses are reviewed

Banking group Barclays has promised to review pay levels and has agreed to implement all the recommendations made by the Salz Review, including working more closely with regulators.

At the bank's annual general meeting, new Chairman Sir David Walker said pay at Barclays and in the banking industry had become "excessive" and that the board was "determined to ensure that shareholders receive an increased share of income and pre-compensation profits".

Barclays also announced that it will "fully implement" all of the 34 recommendations made by the Salz Review of the business's values, principles and standards of operation.

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As such, it aims to take a leading role in regulatory and business standards, to maintain a board with sufficient and relevant banking industry experience, to take action to ensure "the role of the CEO in encouraging open debate and challenge is fulfilled", as well as communicating clear statements throughout the group as to its appetite for "all types of risk".

Walker said his and the board's over-riding priority was now to focus on "building improved performance, on a sustainable basis. That is clearly the route to creating long term shareholder value."

He cited as an example of the new culture the bank's removal of all sales commission for branch-based staff with performance now being measured against customer service metrics.

Management have also created a committee to oversee "board conduct, reputation and operational risk" and in particular ensure business practices and culture "appropriately reflect the needs of all of our stakeholders, especially our customers and clients", with Walker citing remuneration as "a key concern" for many stakeholders and shareholders.

On pay, he pointed to a reduction in bonuses of 16% overall, and by 20% in the investment bank, despite a material increase in adjusted profit before tax.

Questions and comments from the floor at the AGM, according to the Guardian, included calls for the bank to publish the ratio between highest and lowest paid employees, and a challenge from a 75-year old widow shareholder for the board members to give "one of their homes" to charity.

Sir John Sunderland, the new chairman of the remuneration committee, said he was "entirely sympathetic to many of the points that have been raised", insisting the bank would be in the lowest quartile of pay and that in shareholders' interests Barclays would "remain competitive on pay but pay no more than necessary".

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