At what is expected to be a stormy annual meeting at the Royal Festival Hall in London, Barclays chairman Marcus Agius will acknowledge that the bank should have communicated more effectively with shareholders, who are also angry about the low levels of dividends they receive from the bank compared with the amount paid out in bonuses.
Agius will say that the bank "recognises and accepts that remuneration levels across the industry have to adjust to the new reality of higher capital and lower returns for the sector" and insist that the bank will be able to "realign" the share of income in favour of shareholders.
"Evidently, we have not done a good enough job in articulating our case: on some matters we should have communicated earlier and more clearly," Agius will say.
"For this I apologise and 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."
The scale of the protest will be known once the annual meeting ends but is expected to be larger than the 10% of votes registered against remuneration policies last year.
The terms of Diamond's bonus were tweaked last week in an effort to quell any shareholder rebellion, but no changes were made to the £5.7m tax bill the bank paid to relocate the American-born banker from New York to London to take on the top job in January 2011.
Half of the £2.7 million awarded to Diamond in shares for 2011 will pay out only if the bank's return on equity (a measure of shareholder performance) is higher than the cost of equity (a measure of the cost of doing business for Barclays). At the end of 2011, return on equity stood at 6.3%, although – according to a trading update – it had risen to 12.2% in the first quarter of 2012. The latter figure is higher than the bank's 11.5% cost of equity, although Diamond has committed himself to achieving a 13% target.
The bank revealed on Thursday that it was taking an extra £300m hit for compensation claims from mis-sold payment protection insurance (PPI), in a move that suggests rivals such as Royal Bank of Scotland may also have to increase their provisions for similar claims.
The extra provision pushed the bank to a £475 million statutory loss once a reversal in the value of buying back its own debt – a calculation that is required by accounting rules – was included. Stripping out the additional £2.6 billion cost of buying back its own debt and the PPI charge, profits were up 22% at £2.4 million and were higher than had been expected.
guardian.co.uk © Guardian News and Media Limited 2010