Barclays cuts investment bankers’ bonuses by 10 to 12%, and says it could have been worse.

Barclays PLC cut the bonus pool for its investment bank by about 10 per cent to 12 per cent, according to people with knowledge of the matter.

Individual employee variable pay for 2015 would have dropped more if the Londonbased bank wasn’t cutting 1,200 jobs worldwide and closing operations across Asia, said the people, who asked not to be identified be- cause the compensation plan isn’t yet public. For 2014, the investment bank paid out 24 per cent less in bonuses, with the pool falling to one billion pounds ($1.9 billion).

The securities unit is in a period of flux as Tom King, who has been the sole head of the investment bank for almost two years, prepares to leave on March 4. Two months into the job, Barclays chief executive Jes Staley has already taken an axe to the unit with the lowest returns, announcing thousands of additional job cuts and the closure of most of its Asian outposts, while imposing a hiring freeze to restrain costs.

Barclays faces pressure to persuade top-performing employees to rebuff the advances of U.S. banks, which are keeping their bonus pools flat as income is buoyed by a more profitable domestic market. Barclays is set to report that revenue at its investment bank declined in the fourth quarter, and Staley, 59, and chairman John McFarlane, 68, are scheduled to present a broader strategic update alongside the bank’s full-year results on March 1.

The stock fell three per cent to close at 156.75 pence in London Wednesday, extending its decline to 28 per cent this year.

Jon Laycock, a Londonbased spokesman for Barclays, declined to comment on the bonus pool.

The firm is considering candidates from inside and outside the firm, and would prefer a person with a markets background to replace King, one of the people said.

Internal candidates include Joseph Gold, head of the investment bank in the U. S.; Joe McGrath, the New York-based co-head of banking; and Joe Corcoran, the investment bank’s head of markets, the people said. None of the potential replacements responded to emails or telephone calls seeking comment. Laycock, the Barclays spokesman, also declined to com- ment on the candidates.

The bank will pay bonuses in March, later than the usual mid-February timing, people familiar with the matter have said.

In the first nine months of 2015, the investment bank posted a 31-per-cent increase in pretax profit compared with the same period a year earlier. Former CEO Antony Jenkins and King restructured the investment bank in May 2014, moving billions of unwanted or toxic assets and businesses into a non- core unit to be sold off.

As a result, the division’s performance is not precisely comparable between 2015 and 2014.

The chairman said Barclays can’t clamp down severely on compensation, because it would leave the bank at a competitive disadvantage. “In order to motivate them we have to pay them,” he said. If Barclays cut salaries and bonuses, “all that happens is you lose your best people.”

Citigroup Inc. and JPMorgan Chase & Co. planned to leave their 2015 bonus pools unchanged from 2014, moves that put pressure on European rivals with lower profitability, people familiar with the decisions said last year.

Some European firms’ bankers will have a worse bonus season than Barclays staff. At Credit Suisse Group AG, whose shares trade at a 25- year low, CEO Tidjane Thiam has reduced variable pay by 11 per cent, with bonus cuts of more than 30 per cent at underperforming divisions.

Deutsche Bank AG, which reported its first fullyear loss since 2008, has said management board members won’t receive a bonus for 2015, while the investment bank bonus pool has been said to be considered for a reduction of almost a third.