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Barclays braced for more flack over pay as chief executive awaits pounds 4m shares award

February 4, 2014

Jill Treanor

Barclays will risk fresh controversy over bankers' pay next month when it hands its chief executive, Antony Jenkins , shares worth pounds 4m. The bank, which last year tapped its shareholders for pounds 5.8bn of cash to bolster its financial strength, will make the official disclosure about Jenkins and other payments to senior executives in mid-March. The bank faced fierce criticism last year when it announced to the stock exchange that it was handing almost pounds 40m of bonuses to its top management team while George Osborne was delivering his budget speech. Last night Barclays said that Jenkins had decided to waive his annual bonus for 2013 - a separate payment to the shares payout. He also waived his 2012 bonus. In a statement Jenkins said he was forgoing the payout - which could have been up to 250% of his pounds 1.1m annual basic salary (or pounds 2.75m) - as a result of last year's rights issue, the costs of "legacy litigation and conduct issues in 2013" and the cost of pulling out of some operations. He added: "I have concluded that it would not be right, in the circumstances, for me to accept a bonus for 2013, and I have therefore respectfully declined the one offered to me by the board." The pounds 4m shares payout to Jenkins - the result of awards made in previous years - comes amid heightened tensions about bankers' pay as a result of the EU's cap on annual bonuses. The new rule limits payouts to 100% of salary or 200% if the bank wins shareholder approval. Like other banks, Barclays is expected to ask its shareholders to vote at the annual meeting in the spring to allow bonuses worth 200% of salary to be paid to staff. It has also told its investment bankers that it is planning on handing them a third payment - an allowance - to help push up their pay back to levels they might have expected before the bonus cap. Other banks are working on similar schemes, including Royal Bank of Scotland , whose top management team said last week they would waive bonuses for 2013 following the admission that the bank would slump to a pounds 8bn loss. However, long-term bonus schemes could still pay out. Europe -based staff of US banks are also affected by the cap and Bank of America Merrill Lynch is reported to be increasing the basic pay of its managing directors by 20% in anticipation of the bonus cap, while Goldman Sachs - whose boss, Lloyd Blankfein , is reported to be in line for pounds 14m of total pay for 2013 - is also examining ways to maintain payouts to staff. The potential pounds 4m payout for Jenkins was outlined in last year's annual report and shows he stands to receive 1.9m shares. The exact value of the bonus will depend on the share price on the day. Jenkins has set out a plan to make Barclays the "go to" bank since taking over from Bob Diamond in September 2012 . He will announce the bank's 2013 results on 11 February, kicking off the annual reporting season for the banking sector. He will also set out commitments to show the bank's new approach in the wake of the pounds 290m fine for rigging Libor . Antony Jenkins is forgoing his annual bonus for 2013, but will still receive a shares payout worth about pounds 4m


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Source: Guardian (UK)


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