UK Pension Group Accuses Barclays of “Misleading Shareholders” Over Executive Pay [UPDATE: Barclays Pay Chief Resigns]


UPDATE: On Tuesday, Barclays announced the resignation of Sir John Sunderland, chair of the bank’s pay review committee.

Barclays says the resignation was unrelated to pressure from the LAPFF, who publicly called for Sunderland’s resignation on Monday.

The bank has been criticized by the LAPFF and others over high bonuses and compensation.

Read the original Pension360 story, published on Monday, below.


The UK’s Local Authority Pension Fund Forum (LAPFF), a group of 62 public sector pension funds, is taking Barclays to task for failing to replace the chairman of the bank’s pay review committee.

LAPFF, a group that has previously expressed outrage over bank’s “grossly excessive bonuses”, is now saying that the bank promised to replace the chairman of its pay review committee.

But 11 months after the promise, no change has been made.

More from BBC:

A leading pension body has called for the immediate resignation of Sir John Sunderland, chair of Barclays’ pay review committee.

It accuses the bank of “misleading shareholders” for saying before the 2014 annual general meeting (AGM) that Sir John would step down from the role to give way to Crawford Gillies.

Sir John is still in the post 11 months later, the LAPFF says.

Barclays declined to comment on the resignation call.

Barclays was widely criticised by shareholders for its pay policy at the 2014 AGM.

In a strongly worded statement, LAPFF chair Kieran Quinn said: “It is inexplicable how Barclays can have gone back on its promise to the 2014 AGM that Sir John would step down.

“Having messed up remuneration for 2013 Sir John has in fact stayed on as chair and presided over another year of still unacceptably high pay for 2014, and is still in place in March 2015.

“It’s nothing short of misleading shareholders.”

Mr Quinn went on to say that Sir John’s involvement in awarding “grossly excessive bonuses” and his support for former chief executive Bob Diamond, amongst other things, had been “disastrous for shareholder returns and the reputation of the bank”.

The LAPFF represents pension funds with collective assets under management of over $240 billion.


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Pension Executive Pay Draws Criticism From Some Corners

one dollar

On Sunday, the Financial Times released a list of the highest-paid pension fund CEOs. [The list can be found here.]

The compensation numbers drew criticism from some corners, who said CEOs were getting paid too much at a time when workers are being told to “tighten their belts”. Observers told the Financial Times:

Chris Roberts, director of social and economic policy at the Canadian Labour Congress, described the figures as “alarming”. “These are plans in which trustees have a fiduciary obligation to the plan members. They should be in a similar [financial] relationship to plan members,” he said.

Mr Roberts added that he was particularly concerned with respect to public sector funds. “I am not convinced that these salary levels are warranted when public sector budgets are being squeezed and public sector workers are being told to tighten their belts,” he said.


Deborah Hargreaves, founding director of the High Pay Centre, a think-tank, said: “These figures highlight why we cannot rely on pension funds to hold companies to account on pay. These pension chief executives are benefiting from the high-pay culture themselves and often see nothing wrong with multimillion-dollar awards for top bosses. Scheme members often have a different outlook, but do not have a chance to have their say.”


Ms Egan [national pension official at the University and College Union for academics and researchers] said: “[USS members] are aware that [pension executives] get high bonuses because they meet their benchmarks, and yet the funds are doing poorly and members’ benefits are being cut.

“It is problematic and our members find it very difficult. There is a mismatch between the financial world and members who work in the academic world.”

The argument for high pay has always been that it’s necessary to recruit and retain top-flight talent.

Ron Mock of the Ontario Teachers’ Pension Plan justified high executive pay in an interview with the Financial Times last year:

“[To get] upper-quartile performance, you need upper-quartile people,” said Mock.


Photo by c_ambler via Flickr CC License