Following discussions and decisions over pay at Barclays has been like watching mediocre reality television. It’s not scripted, per say, but you scratch your head and wonder aloud whether what you are watching is indeed reality.
Let’s start back in March, when Barclays, coming off a year in which it lost money, decided to increase its bonus pool. Investors, as one would imagine, went bananas. Chief Executive Antony Jenkins, in what has been his most quotable moment, said the pay increases were necessary to avoid a “death spiral” of defections, particularly by U.S. bankers. More than 250 U.S. investment bankers at Barclays made over $1.5 million for 2013, more than double the number of those in the UK.
But then, soon after bonuses were paid and investor fervor mellowed (with time), Barclays’ bankers in New York started leaving anyway, whether they were pushed out or left on their own volition. Skip McGee, head of its US investment bank, Paul Parker, global head of mergers, top tech rainmaker Stuart Francis and a host of others left within months of bonuses being doled out.
There was no death spiral – Barclays is still open for business – but the bonus pool increase didn’t appear work all that well, unless the U.K. bank had no problem with losing those particular bankers.
Either way, six months later, Barclays has changed its tune when it comes to pay. Jenkins came out on Thursday and said that Barclays investment bank will employ “less very highly paid people.” Indeed, he appeared to be telling the truth.
In the city of London, senior managers are getting paid around 280,000 pounds at Barclays, compared with 461,000 pounds at J.P. Morgan, according to Bloomberg. That ranks them a humble 13th in the pay rankings. No data was available for the U.S., but Jenkins appeared to be speaking from a global perspective.
So, to wrap things up, Barclays paid bankers a bunch of money in a losing year, they get yelled at, the people left anyway, and now they’re done paying huge salaries.
Elsewhere in the land of banker pay, compensation for money managers at hedge funds is up around 8%, which also doesn’t make that much sense.
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