Barclays investors demand talks over dividend cut

Several of Barclays major shareholders have demanded talks with the bank's Deputy Chairman, Sir Gerry Grimstone, over its surprising decision to slash its dividend for the next two years; they are unhappy that the decision to cut the dividend by over half in 2016 is contradictory to remarks made by Chairman John McFarlane last year. 

Promise: Investors believe Barclays has reneged on a commitment made by chairman John McFarlane, pictured, to increase dividend pay-outs

Disgruntled Barclays investors have demanded to speak with the bank’s deputy chairman over its decision to slash the dividend in half.

A string of major institutional shareholders want to meet Sir Gerry Grimstone, who is the bank’s top independent director.

They believe Barclays has reneged on a commitment made by chairman John McFarlane to increase dividend pay-outs.

In a letter to investors in September, McFarlane said the bank is ‘taking action to accelerate earnings growth n order to have the capacity to invest in the business and to increase dividends’.

But the bank stunned investors last week when it announced the dividend would be cut from 6.5p to 3p this year and next.

One investor told Sky News: ‘It’s the latest in a long line of equivocations from Barclays, and we think it makes much of what the company says difficult to believe.’

The bank rubbed salt in the wounds by paying out £1.7billion in bonuses and just £1billion to shareholders in the form of dividends.

Barclays has attempted to reassure long suffering investors, with chief executive Jes Staley pledging to introduce higher pay-outs in future. The bank said the cuts were necessary to pay for its plans to get rid of £55billion of troublesome ‘non core’ assets more quickly.

This includes offloading its Barclaycard operations in Spain and Portugal and its investment banking business in Asia.

The row comes as Grimstone yesterday said he is in favour of bankers waiting up to ten years to collect bonuses paid in shares.

Describing himself as a ‘huge supporter of share-based remuneration’, he said this would make senior employees more accountable for their actions. But the 66-year-old City grandee warned global banks would leave London if pay was cut dramatically.