Barclays slashes executives’ salaries in ‘pay for performance’ review
Mar 25 2009 by Alun Thorne, Birmingham Post
Barclays pledged a new era of “pay for performance” yesterday as part of an overhaul of salary and bonuses after last year’s plunging annual profits and multi-billion-pound writedowns.
In its annual report, the banking giant unveiled further details on its remuneration review, which has already seen it announce a 48 per cent fall in total group bonuses for 2008, as well as a pay freeze and zero bonus payout for top bosses.
Chief executive John Varley saw his total pay drop from £4.2million in 2007 to £1.08million, according to the report.
President Bob Diamond, who heads its hard-hit investment banking arm, picked up £250,000 – a fraction of the £21.1million in pay and bonuses he enjoyed in 2007.
But the report revealed that Mr Diamond also received a £7.4million cash bonus last March and will get another £7.4million this year in shares relating to performance from 2005 to 2007.
Barclays said neither Mr Varley nor Mr Diamond would receive any long-term performance incentive awards for 2009, while all executive directors have agreed to defer for two years any payouts under previous schemes.
Only directors Frits Seegers, head of global retail and commercial banking, and finance boss Chris Lucas will have long-term awards for 2009, but they will be slashed by 64 per cent.
Marcus Agius, group chairman of Barclays, said: “We very much regret what has happened to the banking sector and to Barclays’ share price in particular.
“We fully recognise that banks must review their internal governance systems and remuneration structures to ensure there can be no repeat of the turmoil that has impacted the industry and the wider economy.”
The chairman of Barclays’ remuneration committee, Sir Richard Broadbent, said the pay review had yet to be completed, but stressed that all decisions were being made on a “pay for performance” basis.
It has already promised to ensure pay is aligned to risk management, increase the proportion of shareholding requirements for directors and spread out an element of annual pay over multiple years for about 15,000 employees.
Banks – in particular part-nationalised Royal Bank of Scotland and Lloyds Banking Group – have been under pressure to curb the excessive bonus culture.
Barclays has not yet had to draw on state cash, but it saw 2008 profits plummet by 14 per cent and notched up £8billion in writedowns and impairment charges.
The Financial Services Authority said last week that it was proposing new statutory rules to force the sector to rein in future pay policies.
