Bloomberg News

Barclays CEO Paid $3.5 Million as Millionaire Earners Shrink

March 08, 2013

Barclays Plc Chief Executive Officer Antony Jenkins

Barclays Plc Chief Executive Officer Antony Jenkins is cutting costs and eliminating jobs to return the lender to profit, while trying to avoid regulatory missteps such as the 290 million-pound fine for Libor rigging that prompted Diamond to resign. Photographer: Chris Ratcliffe/Bloomberg

Barclays Plc (BARC) awarded Chief Executive Officer Antony Jenkins 2.3 million pounds ($3.5 million) last year and said fewer staff earned a million pounds than in 2011 as the British bank responds to public pressure and cuts costs.

Jenkins earned 63 percent less in salary and long-term bonuses than his ousted predecessor Robert Diamond did in 2011, though he was CEO for only the final four months of 2012. Britain’s second-largest bank by assets awarded 428 workers more than 1 million pounds in 2012, down from 473 in 2011, according to its annual report, which was published today.

“I hope that 2012 will be seen as a turning point in the way Barclays approaches remuneration,” John Sunderland, chairman of the London-based lender’s compensation panel, said in the report. “We are taking a different approach to the balance between directors’ and employees’ remuneration, and returns for shareholders.”

Diamond, who received 6.3 million pounds in salary and long-term bonuses in 2011, was branded the “unacceptable face of banking” by then-Business Secretary Peter Mandelson in 2010 over his compensation. Banker pay has remained an issue for investors and politicians. The European Union announced a cap on bankers’ bonuses this month, a plan resisted by the British government.

Including pension payments and other benefits, Jenkins, a Briton, got 2.6 million pounds in 2012 compared with the American-born Diamond’s 13.2 million pounds in 2011.

Tax Payments

Barclays granted Diamond 5.75 million pounds in so-called equalization payments to the U.S. tax authorities that year, relating to money he owed after his relocation to Britain from the U.S.

Jenkins took on the top job in August after receiving a 700,000-pound salary in his previous role as head of the consumer bank. The 51-year-old is cutting costs and eliminating jobs to return the lender to profit, while trying to avoid regulatory missteps such as the 290 million-pound fine for rigging the London interbank offered rate that prompted Diamond to resign.

Barclays said five employees were paid a total of more than 5 million pounds, compared with 17 in 2011. It didn’t name them. Some 71,581 staff, more than half of the 139,200-strong workforce, were paid 25,000 pounds or less.

Britain’s Trades Union Conference today said Barclays’ pay remains “obscene.”

No Bonus

“Barclays is acting as if the financial crisis never happened,” the labor group, which represents about 6.5 million workers, said in an e-mailed statement. “The EU is absolutely right to push ahead with its bonus cap.”

At least 55 workers were paid more than Jenkins, receiving more than 2.5 million pounds in salary and bonuses.

Jenkins said last month he won’t take a bonus for 2012 in the wake of the Libor and other scandals. He had been in line for a bonus of at least 1 million pounds, the Guardian newspaper reported on Jan. 29.

He received 215,000 pounds in pension payments and 81,000 pounds of benefits such as private health insurance, a car allowance and tax advice. He was paid a salary of 833,000 pounds as CEO, which will rise to 1.1 million pounds for 2013, his first full year in the role. Jenkins was paid 1.84 million pounds, including 373,000 pounds salary and 1.47 million pounds long-term bonus, for his role as CEO for the last four months of 2012, the lender said.

The average bonus awarded to employees fell 13 percent to 13,300 pounds, while awards at the investment bank declined 17 percent from the previous year to 54,100 pounds, Barclays said in February. Some 45 percent of all investment-bank employees got no bonus for 2012.

Dividend, Lucas

In all, the lender will pay about 1.85 billion pounds in bonuses, compared with 733 million pounds in dividends. The firm raised its fourth-quarter dividend to 3.5 pence a share from 3 pence in the year-earlier period.

Finance Director Chris Lucas’s award was almost halved, falling to 2.1 million pounds for 2012 from 4.16 million pounds a year earlier after he agreed to forgo a bonus.

Compensation at Barclays’s U.K. rivals has also been falling. HSBC Holdings Plc (HSBA) CEO Stuart Gulliver received a 1.95 million-pound bonus for 2012 even after the lender paid a record fine for breaking anti-money laundering rules, though the award fell from 2.2 million pounds in 2011. His total compensation fell to 7.4 million pounds from 8 million pounds a year earlier.

Rivals’ Pay

Even after posting a third straight yearly loss, Lloyds Banking Group Plc (LLOY) CEO Antonio Horta-Osorio will receive a bonus for 2012. He won’t receive the 1.49 million-pound award until the shares rise above 73.6 pence, or the government has sold a third of its stake in the lender for more than the price it paid during its bailout. Horta-Osorio didn’t take a bonus for 2011.

Royal Bank of Scotland Group Plc CEO Stephen Hester turned down a bonus for 2012 valued at as much as 2.4 million pounds.

Barclays will cut 3,700 jobs to reduce annual costs by 1.7 billion pounds this year. The lender on Feb. 12 posted a net loss of 1.04 billion pounds for 2012, its first in two decades, as it set aside an additional 1 billion pounds in the fourth quarter for compensating clients wrongly sold interest-rate swaps and loan-repayment insurance.

Barclays has reviewed 75 of its units to weed out those that pose a reputational risk or don’t make profits. The firm said it will shut about four that consume about 90 billion pounds of assets and may shut another 17 that generate about 2 billion pounds of income.

To contact the reporter on this story: Howard Mustoe in London at hmustoe@bloomberg.net.

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net


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