Barclays blinks after pressure from shareholders

As we reported yesterday, Barclays took an unusual move of attaching conditions to Bob Diamond's bonus. They blinked in the face of real pressure from shareholders.

But this morning it's clear they will still face significant opposition at their AGM next week. A note written by a senior figure at one of Barclays' investors that I have seen reveals why.

I'm told that until last night not a single investment house was wholeheartedly going to vote in favour.

And the bank's move may still not be enough for, it is suggested, for two reasons.

Barclays is described as the 'enfant terrible' in terms of pay.

Crucially Bob Diamond's confession that the bank's returns were 'unacceptable' but that he would still receive a reduced, but handsome bonus, has led to a loss of confidence in the way the bank works out pay.

Secondly, some investors will already have cast their votes on the pay awards, ahead of next week's AGM. So the action, described as an 'eleventh hour pacifier' might literally be too little, too late.

Remember many investors are on the side of the bank - on Twitter some have even suggested to me that the fuss has made them more determined to approve the pay deal.

But many believe Barclays has mishandled this terribly and should have seen it coming.

By chance, the vote on Barclays' pay will take place during the final week of the government's consultation over executive pay.

This mess does not help those who argue that the government should stay well away.