January 9, 2025

September 16, 2023, New York, USA: Barclays Bank logo, photographed in Manhattan.

Michael Kappeler | Image Alliance | Getty Images

Barclays has become the latest bank to significantly increase bonus caps for top bankers, an internal memo seen by Reuters showed on Thursday.

The bank’s senior bankers can now be paid up to 10 times their base salary, up from the two-to-one ratio mandated by the EU in 2014 when Britain was a member.

“The revised bonus cap does not change the way Barclays sets incentive pools, which are based on overall group performance,” a spokesman for the bank said, confirming the contents of the memo.

He added: “This will give us greater flexibility in differentiating individual bonuses within a small, well-defined group of colleagues.”

The change only applies to so-called material risk takers (MRT), a regulatory designation for a category of employees whose activities could have a significant impact on the company.

The memo said this would not affect the MRT of the bank’s Irish entity that manages its European operations, which remains subject to EU caps.

Banks including Goldman Sachs and JPMorgan have already made similar moves on variable pay structures for their top bankers based in the UK.

Barclays shareholders voted in favor of the bank’s proposal to change the cap at this year’s general meeting.

The EU initially set pay limits after the 2008 financial crisis to curb excessive risk-taking by banks.

Britain’s financial regulator confirmed in October last year that it would give banks under its supervision greater freedom to pay higher bonuses in a bid to make the country’s financial sector more competitive.

About The Author

Leave a Reply

Your email address will not be published. Required fields are marked *