High earners slashed at Barclays as new joiners get big guarantees
There are a lot fewer euro millionaires among Barclays' material risk takers than there used to be. This could be because Barclays has been splashing out to hire in a lot of new managing directors from outside.
The Pillar 3 report accompanying Barclays' 2017 results, announced today, reveals that Barclays paid 475 material risk takers (senior managers and individuals taking significant risk on behalf of the bank) in excess of €1m last year. This was down from 541 people in 2016, and 612 in 2015.
Barclays' comparative parsimony follows a 22% decline in profits at Barclays' International (which includes the investment bank) in 2017 vs. 2016. It also coincides with the addition of 40 new managing directors, 19 of whom were added in the second half of 2017. Today's Pillar 3 report reveals that 29 people at Barclays International received "buy-out awards" last year worth a collective £31.5m, or an average of £1.1m each.
Barclays' report today also suggests there are plenty of material risk takers (MRTs) at Barclays International who were zeroed in this year's bonus round. Of 982 MRTs in total, only 845 received variable compensation - 137, or 14% got nothing at all. Average compensation (including salary and bonus) for material risk takers at Barclays International was £779k last year ($1.1m). This was less than the $1.2m paid to material risk takers at HSBC and considerably less than was paid to material risk takers at U.S. banks in London in 2016 (the last year for which figures were available), as per the chart below.
Nor does the bad pay news at Barclays end there. Despite the bank's decision this time last year to eliminate automatic 100% bonus deferrals for managing directors, today's annual report reveals that Barclays is still deferring 100% of all bonuses worth more than £1m ($1.4m). Most MDs will almost certainly fall into this category anyway.
Lastly, you probably wouldn't want to be a woman at Barclays' investment bank. Despite the presence of some high profile women, like Kathryn McLeland, the former FIG banker who now runs Barclays' treasury operations and Asita Anche, Barclay's head of systemic market-making, Barclays' newly released figures on its gender pay gap reveal that women at Barclays' international received bonuses that were, on average, 79% lower than men in 2017.
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