Barclays clamps down on bonuses
BARCLAYS is clamping down on pay and bonuses for its casino bankers as it gears up for a confrontation with corporate raider Edward Bramson at its annual meeting next week.
The bank is planning to scale back bonuses as part of an initiative to cut costs, according to a report in the Financial Times.
Bramson, a US activist investor, has amassed a stake of more than 5pc in the High Street bank through his company Sherborne Investors.
He is demanding a seat on the board and calling for Barclays to scale back its investment banking division.
Sources confirmed the bank would be keeping a close eye on pay and bonuses for investment bankers, who in the past have received enormous rewards. Insiders claimed that the restraint was not in response to Bramson, who is now the third largest shareholder, but a recognition of the need to keep costs under control if the bank is to hit profitability targets.
Tim Throsby, the former head of the investment bank, parted company with Barclays recently. In the two years since he took over, the bank went on a hiring spree that is now likely to slow down markedly.
Jes Staley, Barclays chief executive, is firmly opposed to Bramson. Staley, a former JP Morgan executive, is understood to be personally taking more control over the running of the investment bank following Throsby’s exit.
Barclays investment banking division has in the past been notorious for excessive bonuses. The bank was at the centre of a scandal in 2013 when it revealed details of incentive payments adding up to nearly £40m – including £17.6m of shares to then investment banking chief Rich Ricci - on Budget Day, when the City’s attention was focussed elsewhere.
Bramson is likely to ramp up his pressure on Staley if the bank’s first quarter results, due later this week, fall short of expectations. Most investment banks have had a rocky first quarter.
Two large organisations that advise investors how to vote, ISS and Glass Lewis, have come out in support of the bank. However, rival adviser Pirc has abstained and said it might be a good idea for shareholders to back Bramson next year.