Barclays Freezes £22m Worth of Bonus for Ex-Boss Staley amid Epstein Inquiry

Barclays has announced record profits and raised its bonus pool to nearly £2bn, in a high pay bonanza that the bank said was spurred by a battle for talented staff.

The London-headquartered lender increased the bonus pool for its existing staff by more than 17% to £1.3bn, after annual profits more than doubled thanks to the release of cash originally put aside to cushion the blow of the Covid crisis. Including deferred bonuses, the total bonus pot grew 23% to £1.9bn.

Barclays said it had 700 bankers on its payroll who were paid more than €1m a year (£834,365), 33 of which were paid more than €5m. One unidentified banker was paid over €11m, according to documents released alongside its annual report. That is more than the £2.2m that its former boss Jes Staley – who stepped down in November – earned for his role in 2021.

The chief executive, C.S. Venkatakrishnan, said the decision to increase the bank’s bonus pool again this year was partly linked to a need to compete for staff, particularly those with skills in technology. “We pay great attention to paying competitively for everything, which we do,” he said.

His comments echoed those of HSBC earlier this week, which raised its own pool by nearly a third to $3.5bn (£2.6bn) for 2021, marking its highest level since 2014.

But the argument that a ramp in the bonus pool was needed to compete for the best staff was rejected by critics.

Luke Hildyard, the director at thinktank High Pay Centre, said: “Six and seven figure bonuses for a tiny number of elite bankers are very hard to justify at a time when workers across the country including NHS staff, care workers and all the other people who have got us through the pandemic are feeling the full force of pay stagnation and price increases.”

“Barclays and other banks have benefited because we are hopefully over the worst of the pandemic and financial activity is increasing”, said Hildyard. “The argument that bankers’ pay is necessary to attract or retain talent seems especially weak.”

However, Barclays announced it had frozen about £22m worth of bonuses for Staley until there are further developments in a regulatory investigation into his links to Jeffrey Epstein.

The bank said it had “exercised its discretion” to suspend share payouts related to his deferred bonus and long term incentive plan “pending further developments in respect of the regulatory and legal proceedings related to the ongoing FCA and [Prudential Regulation Authority] investigation regarding Mr Staley”.

Staley unexpectedly stepped down in November after an investigation by City watchdogs over how the former chief executive described his links to the late sex offender and disgraced financier Epstein.

It is understood that Staley plans to challenge the investigation’s findings. This could delay or ultimately block regulators from issuing potential fines and penalties, as well as releasing the investigation’s findings to the public.

It came as the lender reported an annual pre-tax profit of £8.4bn, more than doubling the £3.1bn reported for the whole of 2020. The surge in profits was due to the improving economic outlook, which meant Barclays was able to release £653m from reserves originally set aside to offset a potential jump in loan defaults during the pandemic.

That compares with the £4.8bn it was forced to put aside amid fears that customer debts would soar in 2020.

Commenting on the potential risks of expanding western sanctions on Russia in retaliation to Moscow’s threat to Ukraine, Venkatakrishnan said the bank had “exercised a lot of care” when taking Russian clients in recent years. “It’s an unfortunate situation, but from a financial point of view, our exposures are limited.”

When asked about the decision to take on Credit Suisse clients in Africa as part of a referral agreement with the Swiss bank, the chief executive said the deal was not under threat by the Suisse secrets revelations. The massive leak revealed that Credit Suisse harboured the hidden wealth of clients involved in torture, drug trafficking, money laundering, corruption and other serious crimes.

“We have the right to refuse any clients,” Venkatakrishnan said, adding that all new customers would be subject to Barclays’ own checks.

Article credit: https://www.theguardian.com/business/2022/feb/23/barclays-boosts-bonuses-to-13bn-jes-staley-after-doubling-annual-pre-tax-profits