It is true the bank is committed to paying competitively. From "Singapore to
But pay for performance? Nonsense. Pre-tax profits in the investment bank fell 37% last year to pounds 2.52bn and return on equity plunged from 12.7% to 8.2%. That performance demands a cut in bonuses, not a 13% increase.
But Jenkins is now citing a sub-clause in this unwritten contract: "After careful consideration, we determined that an increase of pounds 210m over the prior year in the incentive pool was required in 2013 in order to build our franchise in the long-term interests of shareholders."
It is more like "pay for performance that we hope will occur one day provided JP Morgan et al don't ramp up bonuses even higher and if trading bonds becomes lucrative again".
The second breach of understanding is specific. A year ago, Sir
That statement still holds,
Jenkins, to give him some credit, is getting a few things right at
The investment bank, which only occasionally earns annual returns greater than the group's cost of equity, has become a drag on the share price. Jenkins should ask why
His soundbites are more customer-friendly than his predecessors', but his protection of the bonuses of senior staff at the expense of shareholders' rewards is straight out of the bad old days of the John Varley/
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