Barclays, Credit Suisse Shareholders Criticize Executive Pay Packages

* Investors angry at payouts, want more of the spoils

* More than a quarter of Barclays investors could rebel

* Barclays promises higher dividends, shares rise

* Credit Suisse boss defends pay strategy

By Matt Scuffham and Katharina Bart

LONDON/ZURICH, April 27 (Reuters) - More than a quarter of Barclays shareholders look set to vote against the British bank's controversial pay plan for bosses and Credit Suisse is also facing a backlash as investors seek a greater share of profits.

Stormy annual shareholder meetings at both banks got underway on Friday with many attendees complaining executives are getting too big a slice of bank income at their expense.

Anger is also rife in the population at large that an industry whose excesses sparked the global economic downturn is still awarding its leaders multi-million dollar pay outs.

"People feel that bankers and the banking sector have lost touch with what's real," said Jim Arnott, 56, an executive coach in London who counts bankers among his clients.

"The majority of people feel it's just a culture of greed."

Barclays Chairman Marcus Agius apologised for badly communicating the bank's pay strategy and promised to "materially" increase the dividend shareholders receive, helping to lift the bank's shares more than 4 percent.

But he was heckled during his speech to a packed hall of about 2,000 shareholders and his comments about pay were greeted with laughter in some quarters.

Politicians and shareholder advisory groups urged investors to send a clear message to banks on the need for pay restraint.

"This is a good example of a company which recently ... has been paying three times as much in bonuses as it was in dividends to its own shareholders and it's a good example of shareholders standing up and saying no, this is not acceptable," UK Business Secretary Vince Cable told ITV News.

Barclays paid out 660 million pounds ($1.1 billion) in dividends last year, while its bonus pot for investment bank staff was 1.5 billion pounds, and across the bank it paid 2.5 billion in "performance costs."

Decent results from both Barclays and Credit Suisse this week could quell any rebellion, although many of the votes on the non-binding issue were made early in the week.

The Association of British Insurers and advisory group Pirc have opposed the pay for Barclays Chief Executive Bob Diamond, who took home 17 million pounds last year despite describing profitability as "unacceptable".

The bank last week tweaked his award after investors voiced their anger in meetings with Agius, although many critics said it had not done enough.


"YOU SHOULD BE ASHAMED"

Credit Suisse chief executive Brady Dougan sought to head off criticism on pay in his address to shareholders.

"I recognize that this can be a very controversial topic ... However, having the right policies and structures in place is particularly important for a global bank, which is dependent on experienced and highly qualified people," he said.

But shareholders proved more angered than appeased by a 30-minute lecture on the bank's pay practices by Aziz Syriani, who heads the board's compensation committee.

"You should be ashamed of yourselves for taking so much money away from us. We are the owners of this bank, and you are our employees. We should be the ones who decide what you earn," said Rudolf Weber, to applause from other shareholders.

Dougan was not Credit Suisse's top earner for 2011 - that honour went to Robert Shafir, who earned 8.5 million francs for running the asset management arm which posted a 10 percent rise in pretax profit.

Credit Suisse, which is cutting 3,500 jobs, said it has not paid top executives any cash awards for the past four years, opting for stock-based schemes linked to the bank's share price.

The anger in Europe mirrors protests in the United States, where shareholders in Citigroup surprisingly voted down its executive pay plan last week, while protesters at Wells Fargo's AGM turned up with a huge inflated rat, pockets stuffed with dollar bills.

Comments

[axoaxo]

12:41 AM on 05/01/2012

Cut 3,500 jobs and squeeze more productivity out of the remaining workforce then take the money you save and give yourself a raise!

So typical of the average CEO/upper management

Time for organized labor to rise again to help balance this inequity

[Silverado Lady]

06:27 AM on 04/30/2012

WHAT took them so long?

[dcol]

06:51 PM on 04/29/2012

These high CEO salaries come right out of the shareholders pockets. Don't blame them. Just more of the transfer of wealth to the rich.

[Rodger leMonde]

05:57 PM on 04/29/2012

How long has the answer to every criticism of business been "Oh we can't hurt the stock holders, the first loyalty is to the stock holders" to justify any excess. Now when those stock holders speak up and remind the executives that they are after all employees and subject to the wishes of the stock holders the stock holders are no longer so important?

[iflew]

04:17 PM on 04/28/2012

When the worker is worthy of his wages it is one thing. No worker is worthy of his owner's share, owner's wife, and owner's children's college education. Throw the intercoursing bums out.

[Captain Hindsight]

11:11 AM on 04/28/2012

James "Jamie" Dimon is the current chairman, president and chief executive of JPMorgan Chase, and previously served as a Class A director of the Board of Directors of the New York Federal Reserve., He received a $23 million pay package for fiscal year 2011, more than any other bank CEO in the United States.

1 year = 31,556,926 seconds

1 year = 37,869,120 heartbeats

1 year = 10,512,000 breaths

$2.18 for every breath??????

[mutopis]

09:12 AM on 04/28/2012

But he was heckled during his speech to a packed hall of about 2,000 shareholders and his comments about pay were greeted with laughter in some quarters.

Next time just say, "let them eat cake", that could work...

[Stephen1349]

07:45 AM on 04/28/2012

Don't worry Mr. Greedy Banker, you are giving a ton of money to Governor Romoney to keep you in the one percent. You are doing the right thing for yourself and your family. No worries. If you manage to pull it off with the help of the Koch Crooks and Lucifer Rove, you will still be able to add another yacht to your fleet. In fact, you might even be able to splurge a little and have a car elevator just like Mitt's! Cake anybody?

[EastTraveler]

06:44 AM on 04/28/2012

Why is there a picture of someone enjoying a cigar...? Does that mean that everyone that partakes in one is a fat cat? I just don't think that it qualifies as a image that is fair to those that enjoy a quality smoke once in a while.. Just saying...

[Rodger leMonde]

05:50 PM on 04/29/2012

However it is the most expensive smoke per unit. Cigarettes and a pipe are pennies per smoke.

[DONCAL]

10:33 PM on 04/27/2012

Please don't take my pay away i'll raise your dividens. How pathetic.

[ftlaudhunk]

10:13 PM on 04/27/2012

V U L G A R...While I realize that we all don't have to earn the same income, there comes a point when people are being paid such huge sums of money that it trivializes all of those who work for them. There is no "trickle down" effect as we learned with President Reagan!

[axoaxo]

12:44 AM on 05/01/2012

Let's take the voodoo out of it - time for some "trickle up" economics!

[Liv4ever]

09:44 PM on 04/27/2012

If you don't like it sell your stock. Simple.

[DONCAL]

10:35 PM on 04/27/2012

So the stockholders have no say. Plutocracy at its' finest.

[jackinjax]

08:24 AM on 04/28/2012

Of course they have a say. Just like "Liv4ever" said, it's "simple", "sell your stock". Without investors, they cease to exist.

[axoaxo]

12:54 AM on 05/01/2012

This just leads to even shorter shareholder holding periods and even less accountability

Exactly why these types of CEO types are able to get away with such inequitable pay packages. They know the average shareholder owns the stock for only 6 months or so, and then they are gone, and since organized labor has been routed there is no one to stand up to them and demand a more equitable split of profits.

In the meantime, shareholder holding periods continue to decline...

http://topforeignstocks.com/2010/09/06/duration-of-stock-holding-period-continues-to-fall-globally/


Based on the NYSE index data, the mean duration of holding period by US investors was around 7 years in 1940. This stayed the same for the next 35 years. The average holding period had fallen to under 2 years by the time of the 1987 crash. By the turn of the century it had fallen to below one year. It was around 7 months by 2007.

[jim dorino]

08:28 PM on 04/27/2012

Hey, it ain't just banks. How about Verizon? The Verizon exec's are the unabashed kings of greed. The incoming and outgoing CEO's made 50 million $$ just last year. They keep cutting service to the bone to the point that the NY Attorney General just put in a complaint to the PSC about them ----

http://online.wsj.com/article/APd7e60ed070f5433fb505f06a74a63cb9.html

They send American jobs overseas and they are now trying to take away the workers pensions and healthcare. So where are heck are the media and politicians regarding this injustice? The silence is deafening.

[axoaxo]

12:56 AM on 05/01/2012

Sorry to say, but it is these types that buy the media and politicians

[hifie]

06:57 PM on 04/27/2012

Go get em. It is well past time that the investors stop the excessive executive pay. The money belongs to the investors and to the people who actually do the day to day work When the people who do teh day to day work get paid more the economy improves and it also provides more investing opportunities as the economy grows. There is No Rational reason for them to be making the salary's or the bonuses they make. Take a company on the verge of collapse back form the almost dead, perform a resurrection get paid for the resurrection. After the resurrection is over the day to day operations do not warrant the same level of effort What companies end up with is Kingdoms. The kings or queens and their court reap all the rewards the investors and the day to day operator who actually produce the quality product do not receive their fair share for their efforts or their investment.

[axoaxo]

01:00 AM on 05/01/2012

Agreed, but with investor holding periods declining to a matter of months their leverage is declining. Investors tend to vote with their feet. A resurgent organized labor movement could help keep compensation in check and would possibly help reverse the trend in holding periods. F&F'd

[drmikebaer]

04:26 PM on 04/27/2012

The theives who run the banks and investment firms have lost touch with reality and their conscience. The boards of directors should be dismissed and then jailed by the US attorney general. But the Obama administration is lazy and corrupt. They slap their greedy wrists and no one is tagged to accept responsibility.They pay a small fine that is meaningless. When an executive recieves more pay then all of the stock holders combined we all need to stand up. We the people own the stock and thus the company. Morgan Stanley just reduced the CEO's pay 25% and the bum still recieved more than 10 million dollars. I will be at the next Sun Trust and Morgan Stanley meeting to protest these greedy bastards.