Barclays cuts bonus pool after tough year for investment bank

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Barclays has cut back its bonus pool following a tough year for its investment bank, as the UK lender reported a 15 per cent decline in full-year profits.

The bank trimmed the overall bonus pool by 3 per cent, from £1.8bn to £1.75bn, which it blamed on “the lower year-on-year financial outcomes in some business areas”.

Profits at the corporate and investment bank fell 21 per cent during the year to £2.7bn. Trading revenue dropped 18 per cent to £7.2bn, while investment banking fees declined 12 per cent to £2bn.

Barclays’ results showed group revenue fell 3 per cent in the final quarter of 2023 to £5.6bn, after a poor end to the year for the investment bank.

The 2022 bonus pool was cut by £500mn because of a series of regulatory and compliance scandals. The bank said that without that reduction, bonuses would be down 15 per cent this year.

Barclays is one of the first banks to outline its cut to bonuses following a brutal year for investment banking. Last week, Wall Street heavyweights Goldman Sachs, JPMorgan Chase and Morgan Stanley all disclosed pay rises for their chief executives.

Goldman chief executive David Solomon received a 24 per cent boost to his pay package, taking it to $31mn, despite the investment bank reporting its lowest profits in four years.

In contrast, Barclays’ chief executive CS Venkatakrishnan saw his pay drop 13 per cent, with his overall pay package falling from £5.2mn to £4.6mn.

Venkatakrishnan’s non-fixed remuneration dropped 27 per cent, which was mostly because of losing £148,000 of relocation and housing benefits tied to his move to London two years ago to take up the role.

Chief financial officer Anna Cross also suffered a 25 per cent drop in her bonus, though both Cross and Venkatakrishnan were granted a 2.5 per cent increase in fixed pay.

The number of bankers who earned more than €1mn at the group fell from 698 to 668, a figure the bank was required to publish under EU rules introduced before Brexit.

Barclays suffered an exodus of senior dealmakers in its investment bank last summer.

In October last year, the UK scrapped the cap on banker bonuses inherited from its period of EU membership. The decision was part of the UK government’s post-Brexit push to boost the City of London, although pay consultants have been sceptical that it will lead to a significant change in pay.

Barclays said it would continue for now to apply a cap, but that it would “consider this further” for the next financial year. “A relatively small number of our employees are potentially impacted by this regulatory change,” the bank said.

This article has been amended to reflect the fact that the number of executives earning more than €1mn fell last year rather than rose and that Barclays reported a £111mn net loss for the fourth quarter of 2023, not for the full year.