Bankers' Bonuses: Barclays Cuts Payouts As It Announces £5.9bn Profits
Banking giant Barclays slashed the bonus pool for its investment banking arm by 32% in 2011 to £1.5bn, amid mounting pressure over the controversial payouts.
The average bonus for staff at Barclays Capital was cut by 30% to £64,000 as volatile market conditions saw the powerhouse division's profits slide 32% to £2.96bn.
Meanwhile, the group total bonus pool was down 25% at £2.2bn with the average payout for a group employee down 21% year on year to £15,200.
Elsewhere, the bank, which reported pre-tax profits of £5.8bn for 2011, down 3% on the previous year, said it had capped the cash part of bonuses for investment bankers at £65,000. This compares to £2,000 at the state-backed banks.
The results come after weeks of conflict over bankers' bonuses, in which Royal Bank of Scotland chief Stephen Hester turned down his £963,000 bonus amid mounting pressure and Lloyds boss Antonio Horta-Osorio waived his own payout following a leave of absence.
Chief executive Bob Diamond refused to be drawn on questions about his own bonus, amid reports he could be in line to receive more than £11 million in payouts.
The results said that annual incentives for executive directors and the eight highest paid senior executive officers were down 48% compared to 2010 on a like-for-like basis, though Diamond would not confirm how his own pay fitted into this decline.
Downing Street has so far not made any direct comment on Diamond's bonus, arguing it is different to the case of Hester, as Barclay's did not take any direct money from the taxpayer during the financial crisis.
However Labour leader Ed Miliband has said there is a need for restrain across the industry.
"Some argue that it is no business of the public what bonuses banks pay," Miliband said on Thursday evening.
"I fundamentally disagree, because even banks which are not publicly owned implicitly benefit from a taxpayer guarantee, to the tune of billions of pounds."
Those hoping for a peek at Diamond's pay packet will have to wait until the annual report is published in mid-March.
Addressing the wider issue of bonuses, Diamond said: "We need to balance remaining competitive with being responsive to the public mood."
He said the mood surrounding the industry was not positive but the private sector would only deliver much-needed growth to the wider economy with a "confident" banking sector.
Diamond hailed Barclay's business lending record in 2011 as it beat the so-called Project Merlin targets drawn up between Britain's top five banks and the Government.
Barclays delivered £43.6bn of gross new lending to UK businesses, including £14.7 billion to small and medium-sized enterprises, exceeding its Merlin target by 13%.
"We really got on our horses to get businesses going," Mr Diamond said.
The improved lending figures came as the business revealed income growth in every division but investment arm BarCap.