Barclays share price: Group to trim IB bonuses

Barclays (LON:BARC) is cracking down on its investment bankers’ pay, the Financial Times has revealed. The move comes with the blue-chip lender stepping up its defence against activist investor Edward Bramson ahead of next week’s annual general meeting (AGM).

This morning has seen a drop in the Barclays share price, with the lender’s shares having given up 1.59 percent to 166.76p as of 09:00 BST. The stock is underperforming the broader UK market, with the blue-chip FTSE 100 index currently standing 0.25 percent lower at 7,478.27 points.

Barclays to trim IB bonuses

Several people with knowledge of the matter told the FT that Barclays’ last remaining global investment bank was planning to cut bonuses as part of a cost-cutting drive to boost returns at the underperforming IB division.

“It’s clear that costs are under pressure,” one of the people said, as quoted by the newspaper. “Either you achieve it through pay cuts or you have to do redundancies.”

Two people briefed on the plans further told the FT that the bank was also planning to adopt a tougher line on promotions, with fewer bankers progressing from director to managing director.

The report comes amid pressure from activist investor Edward Bramson who has been calling for the group to scale back its investment bank to improve returns. Bramson, who has amassed a 5.5-percent stake in Barclays via his Sherborne Investors vehicle, is pushing for a board seat ahead of the company’s AGM on May 2.

Analysts on FTSE 100 group

Bank of America downgraded the blue-chip lender to ‘neutral’ last week, without specifying a target on the Barclays share price. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average valuation of 7,478.27p.

The blue-chip lender is due to post its first-quarter update this Thursday, kicking off the FTSE 100 banking reporting season.