Barclays share price: bank introduces new pay scheme to reward top bankers

on Nov 26, 2013
Updated: Oct 21, 2019
Listen, Tuesday, November 26: Barclays Plc (LON:BARC) is to introduce a new pay scheme to provide additional benefits to its top bankers on top of their salaries and bonuses, The Independent reported yesterday. The move comes in the wake of the EU’s plans to cap bonuses at 100 percent of salaries, or 200 percent in case of a ‘super majority’ approval. The bank is planning to seek such an approval.

In today’s trading, Barclays shares gained 0.9 percent to 261.45p as of 14:04 UTC.
**Role-based pay**
The new ‘role-based pay’ will be set up by Barclays at the beginning of next year and will comprise 12 monthly payments. It will not be linked to performance, but instead the amount to be paid to the employees will vary based on economic conditions and the bank’s forecasts.

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Barclays believes that because the payments are given monthly and not awarded retrospectively, and as they are based on the role of the employee and the overall performance of the bank, they should not fall into the category covered by the EU’s cap on bonuses.
Business-focused newspaper City A.M. quoted an email, from investment banking head Eric Bommensath, to employees regarding the role-based system: “The introduction of Role Based Pay allows Barclays both to comply with the legislation and offer market competitive compensation to employees.”

It is understood that regulators and shareholders have been consulted. The Bank of England’s prudential regulation authority is known to be opposed to the caps. Its head, Andrew Bailey, has spoken about the damage they could do, forcing banks to increase salaries to make up for lower bonuses, making their costs less flexible in times of crisis.
Other banks are also expected to roll out similar pay systems for rewarding their top bankers.

**Barclays, RBS sued**
The Evening Standard reported yesterday that Barclays and Royal Bank of Scotland Group Plc (LON:RBS) are among nine banks being sued in the US over the sale of almost $2.4 billion (£1.5 billion) of mortgage-backed securities to two credit unions that later failed. Other banks involved in proceedings over the collapse of the Southwest and Members United unions are Goldman Sachs (NYSE:GS), JPMorgan (NYSE:JPM) and Morgan Stanley (NYSE:MS). However, Morgan Stanley bears the brunt of the legal action having sold more than $416 million of securities to the two unions.
**As of 14:45 UTC buy Barclays shares at 261.95p**
**As of 14:45 UTC sell Barclays shares at 261.90p**
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Prices can go up and down meaning you can get back less than you invest. This is not advice. Dealing services provided by Hargreaves Lansdown.
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