Bank Bonuses time has arrived again!
Sir John Sutherland is chair of the Remuneration Committee at Barclays Bank. He is responsible for setting this year’s bonuses. Chairing this committee would normally go to a director who is independent; that is not an employee of the bank. Sir John has served as an independent director for nearly 10 years. His independence can now be questioned, and even his objectivity.
Total bonuses are up to £2.4 billion, up from £2.2 billion in the previous year. The average bonus across the whole bank was £17,000 up from £15,600 the previous year. But bonuses in the Investment Bank were £60,000 , up from £54,000. Last year 428 bankers in Barclays received bonuses over £1 million. This year’s figure will be revealed next month.
The new Chairman of Barclays has waived his bonuses; and claims support from shareholders to increase bonuses within the bank. How great this support is is not clear. He has also introduced “allowances” for key staff, presumably in the Investment bank. This is to compensate for an EU ruling that future bonuses must be limited to 100% of salary; or 200% if shareholders agree.
The Chairman wants his key staff to have broadly similar pay to Goldman Sachs and J.P. Morgan. So Barclays pay levels must be comparable to banks from “Singapore to San Francisco”. This lays him open to the charge that he is running the bank for the benefit of staff, and not shareholders.
Arguably, this could be a good thing; especially for the large number of staff paid £30,000 and below per annum. However, there is little here about the interests of bank’s customers, apart from good intentions. And finally, the freedom of the bank to pay what it takes to retain top staff ,makes any attempt to control excessive pay seem pathetic.