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Barclays cut its bonus pool 15% and is keeping the bonus cap

Not a banner year at Barclays

Anyone who thought that the removal of the European bonus cap in the UK would lead to a year of tremendous bonuses has been proven wrong by a bad year for banking performance and by Barclays. Barclays released its results today and bonuses are not great. 

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As the chart below shows, the Barclays bonus pool is down on last year. The extent of the fall depends whether 2022's 'risk and conduct adjustments' are taken into consideration. Last year, these cut the bonus pool by £500m, to £1,790m. This year, there are no risk and conduct adjustments and Barclays' bonus pool is nonetheless lower at £1,745m, a decline of 3%. However, if last year's risk and conduct adjustments are disregarded, Barclays' 2023 bonus pool (shown in the dark blue bars) is actually down 15%. It's back to 2018. 

In the 2023 annual report, released today, Barclays also explained that it won't be lifting the bonus cap just yet: "As the new regulations were published close to the end of 2023, the Committee determined that the 2:1 cap would continue to apply in Barclays for the 2023 performance year." Next year, however, this may change.

The bank also noted that when the bonus cap is finally lifted, it will only impact the relatively small proportion of its employees who are regulated. Only 2% of the bank's global employees receive 'role based pay' or the allowances that were added to salaries to mitigate reduced bonuses under the cap.

Elsewhere in the report, Barclays discloses that it's clawed back £17.8m in bonuses from ex-CEO Jes Staley. 

The cuts to Barclays' bonus pool follow an attempt by top bankers to delay bonus decisions in the hope that deals would come through and suggestions that big guarantees paid to all the bankers hired last year would divert bonuses from existing staff, meaning that moderate performers would receive nothing at all. 

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Photo by Taiki Ishikawa on Unsplash

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AUTHORSarah Butcher Global Editor

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