Barclays ‘citizenship day’ will stress the need to win back trust from the public and from customers

Barclays is planning to hold a “citizenship day” next month, even as it prepares for a stormy annual meeting next week about the pay and tax of chief executive Bob Diamond.

The event is to be held on 23 May and will be used by Diamond to outline the bank’s approach to “citizenship”, which he set as one of his four priorities when he took the helm in January 2011.

The plans for the citizenship day – which he promised to hold when he announced the bank’s 2011 profits – are being made before Friday’s annual meeting, at which some shareholders are expected to show their disapproval of the bank’s pay policies.

One in five investors may fail to back the remuneration report – which outlines Diamond’s £17m pay in 2011, including previous years’ deals, and the £5.7m tax liability the bank has paid for him. There may also be a protest vote against Alison Carnwath, the non-executive director who chairs the remuneration committee.

The annual meeting is also expected to contain references to citizenship – which Diamond has described as giving “young people their first job” and lending to businesses.

It was the theme of Diamond’s BBC Today business lecture last year and again in February when the bank reported its 2011 profits. Just a few weeks later, the bank admitted it was at the centre of tax avoidance schemes that HM Revenue and Customs had shut down because it regarded them as “highly abusive”.

Estimates are being made that between 15% to 20% of investors may fail to back the remuneration report – which encountered a 10% protest vote a year ago.

The official outcome of the votes will not be known until after the annual meeting and Barclays made changes to the bonus plan for Diamond, and the group finance director, Chris Lucas, this week in an effort to reduce the scale of any rebellion.

Shareholders technically have until 11am on Wednesday to cast their votes for the meeting, by which time the bank will be able to gauge the scale of any rebellion.

Standard Life, a 2% shareholder, has pledged to support the remuneration report after the move to attach performance criteria to half of Diamond’s £2.7m 2011 bonus and the bank’s pledge to bolster the dividend in years ahead.

The citizenship day next month is expected to involve presentations by Diamond and Antony Jenkins, who heads Barclays’ retail banking operations. Diamond has previously talked about the need to “win back trust from the public and from our customers”.

The bank will now more closely link Diamond’s bonus to return on equity, a measure of financial performance. Diamond will have half of his £2.7m share award for 2011 linked to the return on equity in three years’ time. Only if the bank’s return is greater than its cost of equity (11.5%) will he take that half of the bonus. The same will apply to the £1.8m bonus awarded to Lucas.

The bank’s return on equity was 6.6% and analysts are forecasting 6.3% for 2012. Barclays’ first-quarter profits, which will be released on Thursday, are expected to be £2bn.