'Listen to your shareholders' Cable warns Barclays CEO

Barclays chief executive Bob Diamond Photo: ITV News

It's not long now until we'll know just how many of Barclays' shareholders disapprove of how much they are paying their top brass, and how they have handled the whole issue of pay, particularly Bob Diamond's salary, bonus and 'tax equalisation' package.

But Business Secretary, Vince Cable, has made his views veryplain, telling ITV News that Bob Diamond should "listen to his shareholders'.

Encouraging the many who are planning to vote against the bank tomorrow the Secretary of State said, "this is agood example of shareholders standing up and saying no, this is not acceptable."

Vince Cable has warned Bob Diamond to listen to his bank's shareholders Credit: ITV News

The facts are very clear, this is a company that paid out three times as much in bonuses to its top executives as it paid out to its own shareholders and I think shareholders are drawing their own conclusions from that.

– Vince Cable MP, Business Secretary

The government's attempts to crack down on excessive executive pay have angered many in financial circles. But Dr Cable is clearly determined to press on, praising those shareholders who are attempting to hold top executives to account in a more active way.

He told me the government is determined to legislate by next year to give shareholders more power.In recent weeks a charm offensive from Barclays has failed to appease many shareholders who believe the bank's performance, which Mr Diamond himself has described as 'unacceptable', does not match the levels of pay.

The bank is very unlikely actually to lose the vote at the meeting tomorrow, but some senior investors have told me the vote against the 'remuneration report', basically the bank's pay deals, could hit twenty percent.

Barclays is facing a backlash from its own shareholders Credit: ITV News

Barclays has suggested that they are preparing for a much bigger vote against them. But one significant institution suggested to me this was purely expectation management, that would make a vote of 20 percent look good.

Conventionally, a vote of ten percent of shareholders against a company is embarrassing enough. It's not just politicians who indulge in spin. Yet the bank is in an awkward position. They say to get the best returns they need to get the best staff, so they need to pay the best salaries.

And the row over Stephen Hester's bonus has heaped even more pressure on them, even though Barclays, unlike RBS, did not require a bailout from the taxpayer.

But this is shaping up to be a test case - bolder shareholders, even in a minority, standing up to one of the most powerful companies in the world.

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