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Barclays set to overhaul its bonus structure

Barclays Rain 480

Barclays is reportedly considering a new pay scheme that would reduce bonuses for executives and defer payments until they retire.

The Sunday Times reports that large payouts would be held in shares and not paid out until the executive retires or leaves the bank.

The scheme is based on a new bonus scheme at HSBC, designed by HSBC non-executive director and former Goldman Sachs banker John Thornton last year.

It would see incentives linked more to Barclay’s overall performance as a group, rather than based on individual performance as is the case currently.

News of the pay scheme comes as Barclays continues to fight a wave of negative publicity after the bank was fined £290m in June for manipulating Libor. Anger over the fine caused the resignation of Barclays chairman Marcus Agius, chief executive Bob Diamond, and chief operating officer Jerry Del Missier. Non-executive director Alison Carnwath has also stepped down from the board since the Libor fine.

The Sunday Times reports Del Missier was in line for a bonus almost £20m at the time he left the bank but accepted a lower sum of £8.75m.

Separately, the FSA announced last month it is investigating four past and present Barclays employees, including group finance director Chris Lucas, over the fees it paid for capital raisings in 2008.

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Chris Fleetwood 6th August 2012 at 11:13 am

    Changing the bonus system component of executive pay at banks is, at best, just window dressing. What about the legions of ‘investment’ bankers whose attitudes to risk have been forged by the instant bonus culture? Jam today regardless of the longer term consequences of their actions. It is time that any individual’s bank bonus payout was based on the profitability of the whole of the financial institution of which they are supposed to be a part over a longer time window. Either that or separate the investment bank from the retail entity so that when the deals are made, the bankers do not have the luxury of having someone to bail them out when the financial instruments they create / deals they do turn sour. Can’t have it both ways. Any idiot can gamble when they cannot lose personally or corporately.

  2. Profits down, at last the so called powers that be in Barclays are going to reduce the overpaid Exs from across the water, get the bankback to British led and it might go some where.

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