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Barclays unveils £2.7 billion bonus pot - People Management Magazine Online
Barclays unveils £2.7 billion bonus pot
Discretionary cash payouts of £1.5 billion reignite debate on short-term incentives
Michelle Stevens
Publication date: 16th February 2010
Bankers at Barclays are set to receive generous bonuses after the company announced record profits this morning, though top bosses are refusing their share of the pay-out.
The banking giant announced full-year profits of £11.6 billion for 2009, nearly double that of 2008. This has created a total bonus pot of £2.7 billion – £1.5 billion in discretionary cash bonuses for 2009 and a further £1.2 billion in long-term incentives to be paid over three years.
The average bonus for the bank’s 144,000 staff will be £19,000, while some 22,000 investment bankers at Barclays – which received no state bail-out during the banking crisis – are expecting a discretionary bonus of £95,000 each.
But chief executive John Varley and president Bob Diamond have both shunned their entitlement to a pay-out for the second consecutive year, after the recent public backlash over bankers’ bumper bonuses and the sector’s financial meltdown during the recession.
The latest boost in profits is partly due to Barclays’ sale of its BGI fund management arm to US firm BlackRock last year. The rest of the organisation reported profits of £5.3 billion, with £2.5 billion coming from investment banking arm Barclays Capital.
The average total remuneration package for the company’s investment bankers was £191,000, including salaries and the £95,000 bonus. The bank added that the average income they generated was £515,000 each, up from £281,000 a year ago.
Barclays said it expects to pay the Treasury £225 million in taxes for the new, one-off 50 per cent levy on bonuses of over £25,000.
Nevertheless, the TUC slammed Barclays’ payouts. General Secretary Brendan Barber said: “Barclays’ super-profits show that banks win in both good times and bad. That is why the campaign for the Robin Hood tax – a tiny transactions tax on the billions of pounds that banks whizz round the finance system every day – has gained such strong support.
“Paying huge bonuses when people are still losing their jobs and business cannot get the loans they need because of a crash made in the finance sector goes against every concept of fairness.
“It is not good enough for Barclays to say that they did not receive direct aid. All the banks have gained because it’s now clear that whatever they do the state will bail them out. Policies designed to help banks rebuild their balance sheets have been used to pay bonuses.”
The Royal Bank of Scotland – 84 per cent owned by the taxpayer ¬¬– is expected to announce bonuses worth up to £1.3 billion when its results are reported next week, despite a predicted operating loss of £7 billion.
Barclays unveils £2.7 billion bonus pot
Discretionary cash payouts of £1.5 billion reignite debate on short-term incentives
Michelle Stevens
Publication date: 16th February 2010
Bankers at Barclays are set to receive generous bonuses after the company announced record profits this morning, though top bosses are refusing their share of the pay-out.
The banking giant announced full-year profits of £11.6 billion for 2009, nearly double that of 2008. This has created a total bonus pot of £2.7 billion – £1.5 billion in discretionary cash bonuses for 2009 and a further £1.2 billion in long-term incentives to be paid over three years.
The average bonus for the bank’s 144,000 staff will be £19,000, while some 22,000 investment bankers at Barclays – which received no state bail-out during the banking crisis – are expecting a discretionary bonus of £95,000 each.
But chief executive John Varley and president Bob Diamond have both shunned their entitlement to a pay-out for the second consecutive year, after the recent public backlash over bankers’ bumper bonuses and the sector’s financial meltdown during the recession.
The latest boost in profits is partly due to Barclays’ sale of its BGI fund management arm to US firm BlackRock last year. The rest of the organisation reported profits of £5.3 billion, with £2.5 billion coming from investment banking arm Barclays Capital.
The average total remuneration package for the company’s investment bankers was £191,000, including salaries and the £95,000 bonus. The bank added that the average income they generated was £515,000 each, up from £281,000 a year ago.
Barclays said it expects to pay the Treasury £225 million in taxes for the new, one-off 50 per cent levy on bonuses of over £25,000.
Nevertheless, the TUC slammed Barclays’ payouts. General Secretary Brendan Barber said: “Barclays’ super-profits show that banks win in both good times and bad. That is why the campaign for the Robin Hood tax – a tiny transactions tax on the billions of pounds that banks whizz round the finance system every day – has gained such strong support.
“Paying huge bonuses when people are still losing their jobs and business cannot get the loans they need because of a crash made in the finance sector goes against every concept of fairness.
“It is not good enough for Barclays to say that they did not receive direct aid. All the banks have gained because it’s now clear that whatever they do the state will bail them out. Policies designed to help banks rebuild their balance sheets have been used to pay bonuses.”
The Royal Bank of Scotland – 84 per cent owned by the taxpayer ¬¬– is expected to announce bonuses worth up to £1.3 billion when its results are reported next week, despite a predicted operating loss of £7 billion.
