British bank Barclays on Friday said almost one third of its shareholders had chosen not to back its annual executive pay awards amid controversy over chief executive Bob Diamond's huge wage package.
Barclays said in a statement following its annual general meeting (AGM) in London that 32 percent of shareholders had either voted against or withheld support for the bank's 2011 remuneration report.
Almost 27 percent voted against, including some large institutional investors.
Barclays added that 24 percent of shareholders had failed to back its remuneration committee chairman Alison Carnwath.
None of the results were enough to alter the status quo but were seen as a major embarrassment to the bank at the end of a week in which Barclays unveiled losses and Britain slumped back into recession amid high unemployment.
"This vote is humiliating for Barclays and will cement its reputation as a bank that just doesn't get it when it comes to concerns about excessive pay at the top," said Alan MacDougall, managing director of Pensions & Investment Research Consultants, which advised its members to vote against the pay awards.
"The (British) government has proposed that in future companies that experience a 25 percent or greater vote against their remuneration report should issue a statement to the market setting out how they intend to specifically address shareholder concerns.
"Now that Barclays has seen the level of shareholder dissent it should do the right thing and issue such a statement setting out a specific response as quickly as possible," MacDougall added in a statement.
The lively investor gathering that produced much heckling from disgruntled shareholders was held one day after Barclays reported that it sank into losses in the first quarter as a result of enormous exceptional charges.
The vote came after chief executive Diamond received £17.7 million in salary, bonus, benefits and long-term share awards for his work in 2011, despite admitting that Barclays' performance was "unacceptable" last year.
Diamond's full remuneration package was worth the equivalent of $28.7 million or 21.7 million euros.
The Barclays chief executive, an American national, last week offered to change the terms of his latest bonus in a bid to quell any shareholder rebellion at Friday's meeting.
Diamond and group finance director Chris Lucas agreed not to receive half of their all-shares bonus award for 2011 if certain performance targets were not met within three years.
On Friday meanwhile, Barclays chairman Marcus Agius again apologised to shareholders, telling those gathered at the AGM that management "have not done a good enough job in articulating our case."
He added: "I assure you that in the future we will be engaging differently and more purposefully with shareholders in order to ensure that we obtain a broader level of support on remuneration policy and practice."
Barclays meanwhile suffered a net loss of £337 million in the three months to March, compared with a profit of £1.24 billion in the first quarter of 2011.
The results included a further provision of £300 million to compensate clients who were mis-sold payment protection insurance in Britain, along with other lenders, and a huge accounting charge of £2.62 billion on the value of its outstanding debt.
Stripping out the compensation and other one-off costs, the bank reported a 22-percent rise in underlying pre-tax profits to £2.4 billion, aided by a buoyant investment banking division.
Barclays is not alone among global banks in feeling the heat from institutional shareholders who want to curb the pay and bonuses of top executives amid severe under-performance following the global financial crisis.
Across the Atlantic, shareholders in Citigroup last week refused to endorse a pay plan for chief executive Vikram Pandit and four other officials, dealing a blow to management that had failed to lift the bank's value in recent years.
Barclays survived the global financial crisis without taking a government bailout, unlike major British rivals Royal Bank of Scotland and Lloyds Banking Group.