The Wall Street Job Report

They started with Barclay’s, and they won’t stop there.

Angry, dissatisfied U.K. shareholders are exercising their power to lower CEO salaries at big banks, in a turn of events that surprised execs and board members, according to the Wall Street Journal.

Shareholders rebelled when Barclay’s missed its financial target by 25%, but chief Diamond still got £6.3 million total compensation package from the bank’s board. But shareholders said that Diamond should forfeit his bonus this year, as his peer Stephen Hester did at RBS. The result? Half of Diamond’s bonus is conditional on bank profits.

Here’s more from the WSJ:

At British companies’ annual meetings so far this year, an average of about 8.5% of shareholder votes have gone against companies’ pay plans, up from 6% last year and just over 3% in 2006, according to calculations for The Wall Street Journal by shareholder-advisory group PIRC. Assuming that trend continues, some experts say, companies are bound to become more restrained in compensating their executives, especially when performance is shaky….

In the U.S., five Standard & Poor’s-500 companies have failed to get majority support for their executive-pay plans this year, according to compensation consulting firm Compensation Advisory Partners. The most notable instance was Citigroup Inc.,C -3.17% which proposed paying CEO Vikram Pandit $15 million. None of the firms’ CEOs lost their jobs as a result of the shareholder votes, however.

Shareholders also are feeling “empowered” in the U.S., says Anne Sheehan, director of corporate governance at the $153 billion California State Teachers’ Retirement System. The system voted against the pay proposal for Trinity Mirror PLC, another U.K. company whose CEO recently stepped down amid shareholder protests over pay and performance.

What do you think? Have shareholders waited too long to speak out on executive pay? Should CEO bonuses be conditional on bank performance? And will this trend spread to the U.S.?

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Beth Connolly is Editor-in-Chief of the Wall Street Job Report and the Compliance Exchange. She blogs creatively at When Nutmeg Met Basil. Connect with her on LinkedIn , Twitter, and About.Me.

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