BarCap bankers now hoping for another salary hike
This time last year, bankers at Barclays Capital received a
Somewhat late in the day, several months after people at rival banks, they received a salary increase. Even better, it was backdated to June.
Now, with talk about BarCap participating in a
pact to reduce bonuses with HSBC, RBS, Santander and Lloyds, BarCap bankers are hoping for a repeat of 2009.
"There's a lot of suspicion about this pact," says one senior BarCap employee. They're definitely trying to get costs down and if they can use this as an excuse whilst pleasing the government, they'll probably do it.
"The hope is that they'll give us another backdated pay increase like last year," he adds.
Officially, BarCap isn't commenting on the alleged pact. However, according to one BarCap employee Bob Diamond was seen leaving HSBC last week - fuelling suspicions that the pact is a reality.
There are also questions over whether Lehman bankers in the US will be included in the pact. Their omission could inflame rumoured tensions between London and New York. Their inclusion could irritate New York. Standard Chartered has dropped out of the pact on the grounds that 97% of its staff work abroad. Maybe BarCap could get some leniency for its Lehmanites?
Headhunters claim BarCap really needs to pay its FICC people this year. There were various departures in June after the bank paid allegedly careful bonuses for 2009. On the other hand, BarCap also needs to keep the UK government on its side. Entering a bonus pact may to deflect further bonus restrictions and suppress calls for the separation of retail and wholesale banking.
This may be wishful thinking. Any money not paid as bonuses will apparently be paid to the Big Society Bank instead. Already, LibDem MPs are suggesting the contribution isn't enough.
"This is breathtaking arrogance from the banks: 1bn, say, for a Big Society Bank would be just 14p for every pound they paid in bonuses last year," the Guardian quotes Lord Oakeshott, a Liberal Democrat treasury spokesman, as saying.
