Following a questioning letter to Sir David Walker about bonus awards for 2013, UKSA was invited to meet him. This meeting took place on Monday 7th April.
Sir David assured us that the question of their obligations under section 172 of the Companies Act was regularly in its directors’ minds. He accepted that some incentives previously offered to UK Retail staff were wrong and not in the interests of customers nor, by implication, in the interests of shareholders. He mentioned a new Conduct and Reputation Committee of the Board set up to address some of these areas, but said that all sales based incentives for retail staff had already been removed.
Looking back to 2012, Sir David thought the bank had been unduly harsh in its view of bonuses then, which had led to an unusually large loss of staff, particularly on the investment banking side (including compliance officers), because of better terms elsewhere. Barclays’ investment banking operations are now under review, but it is clear that it needs to retain the right staff to ensure a viable business.
Barclays, Sir David said, is “on a journey” towards a lower “compensation ratio”: a major aim that will take time to achieve.
We were pleased to learn that Sir David shares UKSA’s concern that the distance between ordinary shareholders and the companies they invest in has widened in recent years.