Barclays share price: Bank slashes investment bank bonus pool

on Feb 25, 2016
Updated: Oct 21, 2019

Barclays (LON:BARC) has cut the bonus pool for its investment bank by about 10 to 12 percent, Bloomberg has revealed, citing people familiar with the matter.

According to the sources, individual employee variable pay for 2015 would have dropped more if the blue-chip lender was not cutting 1,200 jobs worldwide and closing operations across Asia. For 2014, the investment bank paid out 24 percent less in bonuses, with the pool falling to £1 billion.
In the past, “most of the returns at investment banks went to employees and not to shareholders, and I think that game is over,” chairman John McFarlane said at the British Bankers Association’s annual conference in October. However, he noted that Barclays could not clamp down severely on compensation, because it would leave the bank at a competitive disadvantage. “In order to motivate them we have to pay them,” McFarlane said, adding that if Barclays cut salaries and bonuses, “all that happens is you lose your best people.”

In a separate development, Barclays narrowly avoided a major legal challenge today, when a High Court judge dismissed an application to review the handling of the bank’s compensation process. The application was made by law firm Mishcon de Reya, acting on behalf of Holmcroft Properties, a nursing home operator, in a case relating to alleged mis-selling of interest rate products.
Barclays’s share price has risen today. By 08:2 GMT, the stock had gained 2.11 percent to trade at 160.05p. Meanwhile, the FTSE 100 was 1.43 percent up at 5,951.01 points.
As of 08:34 GMT, Thursday, 25 February, Barclays share price is 160.10p.