Barclays Set To Unveil £2.5bn Bonus Bonanza
Barclays is to pay out close to £2.5bn in bonuses for last year despite having had to raise £6bn from investors to shore up its finances.
Sky News can reveal that the bank will next week say that it made in the region of £2.3bn to £2.4bn in incentive awards for 2013, a rise of about 10% on the previous 12 months.
The disclosure will stoke the continuing controversy about bankers' pay just days after Barclays' chief executive, Antony Jenkins, waived a £1.5m bonus in an attempt to defuse the row.
Barclays will confirm its bonus awards for 2013 alongside its annual results announcement next Tuesday.
A senior employee said on Thursday that the final bonus number would represent a rise on last year's figure of £2.168bn but would be modestly lower than the £2.578bn awarded in 2011.
It is expected to defend the increase by pointing to a robust performance by its investment bank in the US and the threat to its Wall Street business by attempts from rivals there to poach its top staff.
Sky News revealed last week that the proportion of Barclays' revenues paid out to staff would also increase from 2012's 39% figure.
Part of the explanation for the increase on last year's payout ratio and bonus pot is the fact that the 2012 numbers were reduced sharply by moves to claw back £300m in bonuses following Barclays' involvement in the Libor rate-rigging scandal
Nonetheless, the increase in awards for a period in which revenues struggled will make next week's results announcement an uncomfortable one for Mr Jenkins, who has vowed to make Barclays "the go-to bank" for its stakeholders.
The compensation-to-income metric, which encompasses base salaries as well as bonuses, is significant because it is closely watched across the City and Wall Street as an indicator of the generosity of investment banks' pay policies.
Some City investors have been unsettled by the news that the remuneration ratio will increase, although Barclays is likely to avoid a full-blown row over the issue if it continues, as expected, to rebalance distributions between shareholder dividends and employees' pay.
However, the rise in the proportion of revenue paid out to staff will jar because the trend during the recent round of Wall Street banks' results has been in the opposite direction.
Mr Jenkins and his chairman, Sir David Walker, who is expected to step down next year, have pledged that pay restraint will form an important element of their efforts to reinvent Barclays in the aftermath of Bob Diamond's reign.
Sources said that Barclays would still attempt next week to demonstrate that it was exercising discipline while deciding on employees' pay awards.
Roughly two-thirds of the £2.4bn that will be awarded in bonuses for 2013 is likely to be allocated to Barclays' investment bankers, as in previous years, according to analysts.
A significant proportion of these will be subject to deferrals over several years and clawback in the event of subsequent evidence that the basis on which the bonuses were awarded was unjustified.
Barclays will also disclose - although possibly not until its annual report is published next month - that it paid out hundreds of millions of pounds in bonuses during 2013 which had been awarded in shares in 2010.
Barclays declined to comment.
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