Barclays Imposes £450m Libor Bonus Hit
Barclays is imposing more than £450m of financial penalties on its employees in relation to the Libor-rigging scandal which last year triggered the departure of its chief executive.
I understand that the bank will disclose details in its forthcoming annual report of moves to reduce variable pay for staff by far more than the £291m in fines levied by UK and US regulators.
The disparity between the two figures underlines the determination of Antony Jenkins, Barclays' chief executive, to demonstrate accountability across the bank for the reputational crisis that engulfed it last summer, according to insiders.
Investors said the move was a step in the right direction but questioned why Barclays had still decided to award £1.8bn in bonuses to its staff given the scale of the misconduct-related fines and charges taken by the bank during 2012.
The £450m cut to bonuses comprises about £290m derived from reductions to the 2012 bonus pool and at least £160m which has been clawed back from employees' deferred share awards from earlier years, according to people close to Barclays.
In total, somewhere in the region of £300m was clawed back by Barclays' remuneration committee in 2012, with Libor accounting for roughly half the total. The rest was accounted for by Barclays' ongoing exposure to the payment protection insurance (PPI) mis-selling scandal and other misconduct-related charges.
The details will be highlighted in Barclays' annual report, which could be published as soon as next week. The Guardian reported this morning that the report would disclose that more than 600 Barclays employees were paid more than £1m last year.
The additional disclosure follows the appointment of Sir David Walker as Barclays' chairman last autumn. Sir David was the author of a key report on corporate governance in the banking sector in which he advocated the publication of the number of employees earning specific salary brackets.
Last year, the bank faced a huge revolt from leading investors over the pay deal awarded to Bob Diamond, its former chief executive. Shareholders were also furious that the bank paid out three times more in bonuses to employees than it did in dividends to Barclays' owners.
Mr Jenkins has pledged to address this imbalance, and in this month's annual results significantly reduced the ratio.
Barclays declined to comment.