In response to the Libor scandal Barclays hired a well respected old-world Chairman with the express purpose of proving to investors, shareholders, media, regulators and politicians that the company is serious about change.
The hire was met with skepticism as we are conditioned to listening to words of contrition and apologies only to be followed by a continuation of prior activities.
Our cynicism was called to the test when the newly installed Barclays Chairman, Sir David Walker, spoke before England’s parliament.
Sir David Walker told the Members of Parliament that “It’s very import we see changes in remuneration practices tied to sales or revenue.” The Chairman expressed a belief that the company discontinues current incentive pay practices tied to sales activities.
”The inappropriate incentivisation is accountable for a lot of what has gone wrong. The problem that I think has been most serious is not so much levels of remuneration, but the gearing of remuneration to revenue.”
He also cast blame on shareholders that exert pressure on banks to increase their leverage and take undue risks to enhance share price appreciation and their sole obsession with short term gains over longer term results. ”They encouraged banks to lever up. The preoccupation with short-term revenues in the investment banks has been hugely damaging,” he said.
He also called for the publishing of the top 100 highest earning employees.
Questioning the sales at any cost culture? Align compensation with real results not illusionary short-term gains? Attack the ethics of your own shareholders? Willingly disclose highly paid employee compensation?
Is he really the Chairman or did Occupy Wall Street infiltrate the executive ranks?