BARCLAYS SHAREHOLDERS URGE NEW CHAIRMAN TO BRING HIS 'CHAINSAW'

Barclays Bank’s new chairman, John McFarlane.

Barclays shareholders have called on the bank’s new chairman, John McFarlane, to live up to his fearsome reputation by carrying out a ruthless overhaul.

At its annual general meeting in London on Thursday, individual shareholders complained about the bank’s financial performance, small dividend and the sums paid out to top bankers.

Several said they wanted McFarlane to shake up Barclays with the same severity he showed at Aviva when he became chairman of the insurance company. McFarlane took up the job of Barclays chairman at the AGM.

Philip Meadowcroft, a shareholder who campaigned for reform at Aviva, told the meeting Barclays needed the kind of cultural change McFarlane achieved there by slashing management and increasing cash generation.

He said: “John McFarlane is not just a quietly spoken, genial Scotsman. He is a thoroughly ruthless turnaround specialist as he has demonstrated at Aviva. Has Barclays hired the sort of turnaround specialist that the current board of directors can cope with?

“Everyone on the platform alongside you, chairman, needs to know that only two Aviva directors remain who were there when John McFarlane arrived at Aviva with his axe.”

Another shareholder, Phil Clarke, complained that Barclays made a £750m loss over the past three years but paid £1m or more to 359 employees last year. He rejected the argument that it needed to recruit and hang on to talented people, saying: “It’s the talent that has done for us recently.”

Clarke said Sir David Walker, the previous chairman, had done a reasonable job and wished him well, but he said he was looking forward to McFarlane bringing his “chainsaw” with him from Aviva.

The veteran banker helped oust Andrew Moss as Aviva’s chief executive in 2012 after a shareholder revolt over pay and financial performance, and took over temporarily as the executive chairman, cutting costs and redrawing the insurer’s strategy.

He was appointed by Barclays in September following a row with shareholders over a big increase to investment bankers’ bonuses. Antony Jenkins, the chief executive, justified the rise by saying the business faced a “death spiral” of defections if it did not pay out.

Michael Mason-Mahon, a regular critic of the Barclays board, predicted McFarlane would not spare the rod and said he would not bet on any of the directors being in place in a year.

McFarlane, who first joined Barclays as a non-executive director in January, sat impassive during the meeting. However, in an unusual move, he released a 1,500-word letter to shareholders alongside the AGM speeches from Walker and Jenkins.

He said costs were too high and that business with low returns may have to be closed or sold if they could not be revived. McFarlane indicated that the bank should settle regulatory cases to make the it more investable.

Barclays is awaiting a huge fine in the US for rigging currency markets after it pulled out at the last minutefrom a settlement which cost six other companies a total of £2.6bn.

McFarlane wrote: “We therefore need to get the errors of the past behind us, to achieve a satisfactory rate of revenue growth, greater cost discipline and a more dynamic reallocation of capital. While substantial progress has been achieved ... it is transparent that a great deal still needs to be done.”

Walker was drafted in after Bob Diamond was forced out as the chief executive by the then Bank of England governor, Sir Mervyn King, in 2012. He appointed Jenkins, a retail banker, as the chief executive in an attempt to make a break with Barclays’ image as a company ruled by flashy investment bankers.

Unlike in previous years, there was no rebellion over Barclays’ pay as 97.5% of votes went in favour of the remuneration report.