"At Barclays we believe in paying for performance and paying competitively," declared Antony Jenkins, chief executive, several times on Tuesday.
It is certainly true that the bank is committed to paying competitively. From "Singapore to San Francisco," as Jenkins put it, Barclays wants to go head-to-head with JP Morgan and Goldman Sachs to hire and retain the investment bankers it values most highly.
But pay for performance? Nonsense. Pre-tax profits in the investment bank fell 37% last year to £2.52bn and return on equity plunged from 12.7% to 8.2%. A performance of that sort demands a cut in bonuses, not a 10% increase.
Jenkins and Barclays have breached two understandings with shareholders. The first is the general principle that the bonuses are meant to adapt to the financial weather. Banks themselves prefer the term "variable compensation" – awards are meant to go up in sunny years and down in a downpour.
But Jenkins is now citing a sub-clause in this unwritten contract. "After careful consideration, we determined that an increase of £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."
In other words, Barclays feels long-term franchise-building, however vaguely expressed, trumps the need to tie annual rewards to annual performance. This is not "pay for performance" as the outside world understands the term. 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 interesting again."
The second breach of understanding with shareholders is specific. A year ago Barclays declared that a "turning point" had been reached on pay and that shareholders would get a fairer cut in future.
Here's Sir John Sunderland in last year's annual report: "For 2012 and in future we are taking a different approach to the balance between directors' and employees' remuneration, and returns for shareholders."
That statement still holds, Barclays tried to suggest on Tuesday: medium-term targets for compensation-to-income ratios have not been altered. Really? Sceptical shareholders will feel that "medium term" is a flexible term at Barclays; the phrase seems to mean whatever management wish it to mean.
Jenkins, to give him some credit, is getting a few things right at Barclays. But his line on bonuses is absurd. What he has revealed is that when "pay for performance" and "competitive pay" come into conflict, Barclays will choose the latter.
Jenkins' soundbites may be 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 John Varley/Bob Diamond era. Barclays is still being run for its staff, not its owners.
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