Barclays face shareholders' fury
Barclays was accused of "paying for Manchester United but getting Colchester United" as it faced shareholder anger over rising bonuses and falling profits.
Shareholders applauded a succession of speakers criticising its remuneration policy while the head of the bank's remuneration committee, Sir John Sunderland, was heckled, and a major investment fund said it would not back the pay measures.
Barclays recently defied calls for restraint by hiking its staff bonus pool by 10% to £2.38 billion despite profits falling by a third and plans to cut thousands of jobs.
Chairman Sir David Walker defended the pay policy, saying Barclays had to act after it faced a drain on investment bankers to US rivals last year.
But there was applause when one shareholder, Phil Clarke, questioned whether nearly 500 staff being paid £1 million were worth it - and suggested halving their packages in order to increase dividends by 50%.
Mr Clarke also described a rights issue to raise cash from shareholders as an "atrocity" and said the performance of Barclays shares suggested the market did not have confidence in the highly-paid employees.
He said: "We are paying for Manchester United but we are getting Colchester United."
Another investor, Edward O'Toole, said the bank had been "transformed from a traditional culture of banking prudence to one of management greed".
Meanwhile, Alison Kennedy, representing Standard Life investments, said it would not be backing the Barclays remuneration package to be voted on at the meeting though it would back other key pay measures.
She said: "We are unconvinced the amount of the 2013 bonus pool was in the interest of shareholders."
Sir John Sunderland, head of the remuneration committee, was heckled when he pointedly replied that he would have appreciated Standard Life making the point during an earlier consultation process.
He said it was anticipated that the bonus decision would cause controversy - to which one shareholder shouted "you didn't care".
But Sir John insisted: "The easy option would have been to make a non-controversial decision around the bonus pool. There would have been no criticism.
"But we would have seen a significant further exodus from the investment bank.
"Instead we chose the difficult option. We believe it is in the best interest of banks and its shareholders."
The bank recently announced that Sir John is to be replaced by Crawford Gillies at a date to be set.
Sir David, the chairman, said the annual rise in the bonus pool was affected by the pay-outs being hit in the previous year in the wake of the Libor rate-rigging scandal - and even said that the cuts in 2012 has gone "too far".
The chairman said he "emphatically" acknowledged the concerns "strongly expressed" by shareholders and others about rising pay.
He told the meeting: "This is not a comfortable position to be in and we are determined to change it."
But he said the resignation rate of senior employees in the US had doubled in 2013, while higher numbers of high quality recruits had turned down offers, and there was a "genuine threat" to part of the bank's business.
"We took our decision on bonuses in the firm belief that it was in the best interests of shareholders to protect key franchises in the bank through this difficult phase of transition.
"Despite all the reservations that have been expressed, I remain confident in my view that we took the right decision."
It comes as Barclays said it was expected to see a "small reduction" in adjusted pre-tax profits compared to last year when first quarter results are published in May.
Chief executive Antony Jenkins said its fixed income, credit and commodities business within the investment bank had continued to face challenges.
Meanwhile, it emerged that the UK Shareholders' Association, representing UK private investors, had written to Barclays to ask how it has fulfilled its obligation to shareholders despite dividends being under pressure.
Barclays announced the increase in its bonus pool in February despite a 32% drop in annual profits to £5.2 billion. It also confirmed plans to cut up to 12,000 jobs this year.
Since then it has emerged that hundreds more jobs look set to go, mainly at its investment banking arm, when Barclays announces the results of a strategic review shortly after the bank's trading update next month.
Later, Sir David appeared to hint to reporters that the strategy review on May 8 would see Barclays take an axe to its highly-paid investment bankers.
Asked how he could be sure bonuses would come down, he said: "Wait for the investment bank strategy."
Meanwhile, on the intervention of Standard Life on pay, he said there had been "just a bit of irritation" that it had not expressed its objections earlier after the bank had consulted "impeccably" on investors' views.
Sir David also denied that the Barclays board was deaf to the anger of smaller, private, investors.
He said: "Don't think we are glue-eared at a session like this. I take away some very strong impressions about the strength of feeling of shareholders."
But the chairman brushed off the intervention of Business Secretary Vince Cable, who this week warned top UK firms that persisting with high levels of executive pay would be a "dereliction of duty" and damage trust.
He said it was for Mr Cable to "make the poses and all the rest" but that he was concerned with the views of shareholders.