By Mark Kleinman, City Editor
Barclays will this week suffer a sizeable City rebellion over its decision to hike bonuses last year while simultaneously receiving overwhelming shareholder backing for its future pay plans.
Sky News has learnt that more than 90% of investors who have cast their votes in advance of this week's annual meeting are supporting the bank's plans to pay up to twice the level of employees' salaries as bonuses under new European Union rules.
The scale of investor support for that resolution is important because it will be followed by votes at the AGMs of the other major UK banks in the coming weeks.
Insiders say that a similar result is expected on a resolution setting out Barclays' future executive pay policies, in what will represent the first major test of a binding vote introduced by Vince Cable, the Business Secretary.
At Barclays, the binding vote encompasses new role-based allowances being handed to hundreds of Barclays' top managers, in effect enabling them to be paid higher bonuses.
However, insiders said that roughly one-quarter of shareholder votes cast so far had opposed last year's directors' remuneration report, the ballot for which is non-binding.
Mr Cable has written to the remuneration committee chairs of FTSE 100 companies to warn them that there are "signs that some companies continue to consider pay awards which appear excessive in light of recent performance".
An aide to the Business Secretary said the timing of his letter was designed to coincide with the Barclays AGM.
Barclays has sought to appease restive investors by recruiting a new chairman for its board pay committee, replacing Sir John Sunderland.
One insider said on Tuesday that Sir John's re-election had also received comprehensive support, with Thursday's AGM expected to show that he had been backed by more than 90% of shareholders.
A number of institutional investors, including Fidelity, have criticised pay at Barclays in recent weeks after the bank increased its bonus pool by 10% to £2.4bn despite a slide in profits.
However, Richard Buxton, one of the City's top fund managers, who oversees billions of pounds at Old Mutual Global Investors and is a long-standing Barclays shareholder, told Sky News he was supportive of Antony Jenkins, the bank's chief executive.
"Our focus is on the progress being made to improve returns, notably within the investment bank," he said.
"We are confident that much more will be achieved here, which will feed through to lower costs and lower compensation over time, albeit in an uneven fashion."
He added that Barclays had made "significant progress on compensation" in 2012 but had had to "give a bit back last year" in a more competitive market.
"I'm confident that after further work on costs this year, the three-year average 2012-2014 numbers will show material moves in the right direction.
"The bank knows it has to improve the staff-to-shareholder reward ratio - but this is a multi-year journey."
Barclays, which will outline further cost-cutting plans at its investment bank on May 8, declined to comment ahead of its AGM.
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