Lunchtime Links: Has BarCap increased pay by 20%?

Confusion reigns. Barclays has released its fourth quarter results and they seem to say some strange things about pay at BarCap.

Moreover, BarCap appears to be endeavouring to sweep this strangeness under the carpet.

BarCap compensation figures aren't actually broken out - the bank just provides a compensation ratio. This, it said today, increased from 33% last year to 43% this year, excluding the cost of its own credit. This implies that the total comp bill has risen from 4.4bn to 5.7bn.

Over the same period, BarCap's increased its headcount from 23,200 to 24,800, implying that compensation per head has risen from 126k to 178k in a single year - an increase of 20%.

Needless to say, this is not a particularly PC occurrence. Nor does it square well with Project Merlin.

BarCap has tried to elucidate for Robert Peston, saying:

"It [the pay figure] includes prior year deferrals, changes in pension costs, the full-year effect of last year's salary increases which came through part way through the year, a build out of Barcap, and a shift in business mix."

And, suddenly, last year's bonus pool has shrunk

BarCap also stands accused of retrospectively restating the size of its bonus pool for the purposes of political correctness. Today, it said its bonus pool for 2010 was 2.6bn, down from 2.8bn last year. But last year, it said its bonus pool was 2.3bn, suggesting this year's bonus pool is somewhat larger.

Whatever the case, it looks like BarCap is paying better than before - although that pay is likely to be disproportionately skewed towards all the equities and M&A bankers it's been hiring.

Other BarCap stuff:

Other notable conclusions from BarCap's results and call include the facts that:

- It hired 1,600 people last year, even though it was supposedly cooling off hiring. Barlcays Wealth hired 300, even though it was supposed to be doing a lot of hiring.

- BarCap's European hiring is now 90% done; its Asian hiring is 70% done.

- BarCap did rather well in cash equities and investment banking in the fourth quarter, but it still seems to be having problems in equity derivatives.

- Barclays is now on a ruthless cost cutting drive in which it wants to remove 1bn from its cost base by 2013 (of which 500m shall be extracted this year) by eliminating duplication in finance, technology and HR.

- Anything less than 'outstanding performance' from every single person shall not be tolerated.

- No one need worry about slimming down in BarCap's FICC business because it's a flow monster already. It's all fine.

Other news:

A tax on Barclays's 2.7bn bonus pool could halt many cuts, activists say. (Guardian )

The argument for breaking up the big banks, to separate investment banking from retail banking, is based on a flawed analysis of the underlying causes of the financial crisis and the recession which followed. (Postrecession )

When the Asset Protection Agency needs to hire someone, it does it through RBS. (HMTreasury)

Financial regulators in the US need to hire 5,000 people to implement Dodd Frank. (Bloomberg)

For big bonuses, go East. (WSJ)

"People are very disappointed in Asia," said Andrew Morris, managing director of Greater China at staffing firm Robert Half International Inc. "People had much higher expectations than their peers in the U.S. and the U.K." (WSJ)

JPMorgan commodities revenues said to have shrunk 40% last year. (WSJ)

The City needs to 'manage its grief' about regulation moving to Brussels. (Bloomberg)

Europe's banks will be subject to more "top-down" regulation, with a single set of rules governing their oversight. (Telegraph)

"In five years, we'll be talking to the EBA and Brussels. The FSA will be an afterthought." (Financial Times)

Credit Suisse's average return on equity in the 40 years through 2000 was 8%, before rising to 27.5% in 2006. (Bloomberg)

Hedge fund CQS keeps hiring sales staff. (Financial News)

How traders, analysts and clients see each other. (Naked Options)

The cursed class of 2008. (Wall Street Oasis)

"At bottom, I'm not all that interested in money," Michael Lewis tells Planet Money. (Ritholtz)

Bess Levin Humiliates a Hedge Fund Executive. (CNBC)

Man bags cause back pain. (Telegraph)