This is what "pay for performance," as practised by Barclays, looks like: in a year in which profits fell by a third, shareholders' dividends were flat and the share price went sideways, 481 employees collected £1m or more. That was 53 more than in 2012.
At the top of the tree, eight individuals got more than £5m, and another 54 earned between £2.5m and £5m. Again, those tallies were higher than in 2012. Overall, the bonus pool was increased from £2.2bn to £2.4bn.
If this division of spoils – bumper hand-outs for senior staff while shareholders get scraps – strikes you as a distortion of capitalism, you are not alone. Even the Institute of Directors, the bosses' club, is flabbergasted that Barclays has the nerve to hand out bonuses worth three times the dividend pay-out to shareholders. "For whom is this institution being run?" it wonders. Quite.
Chief executive Antony Jenkins' answer is that shareholders would be in an even worse spot if Barclays hadn't paid up. The investment banking division, where the big bucks are made, faced a "death spiral" of staff defections that was avoided only by awarding bigger bonuses despite the division's 37% slump in profits, he says. Resignations in the US were running at twice the previous year's rate, pleads the bank's pay chief Sir John Sunderland. These pay decisions are "extremely difficult," intones £750,000-a-year non-executive chairman Sir David Walker.
What's truly difficult, however, is to understand how Barclays hopes to meet its high-minded pledges to reform pay in the interests of the owners. The bond traders and supposed superstar deal-doers have the board over a barrel. When profits fall, they want bigger bonuses not to defect to JP Morgan, Citigroup or a hedge fund. When profits rise, it's down to the individuals' brilliance and they demand to be paid accordingly.
As ever with Barclays, a happy land is promised around the next corner. Profits, with the help of technology, will recover; the investment bank will earn returns on equity greater than Barclays' cost of equity for a change; and the principle of "pay for performance" can be re-introduced from a new base.
That's the theory. In practice, Jenkins has no more than a year to show he is living in the real world. Talk of a "death spiral" is desperate stuff. A chief executive can play that get-out card only once. Without an improvement in profits from investment banking, the only alternative will be to retreat from areas where Barclays is losing to big Wall Street firms.
As matters stand, the division is dragging down the share price. Barclays, with a strong UK retail business and the excellent Barclaycard operation, is valued at just 0.8 times its book value. Lloyds, which doesn't have an investment bank, trades at 1.6 times.
Meanwhile, Jenkins has chosen this moment to pick a fight over bonuses with the chairman of the Treasury select committee, Andrew Tyrie, whose Banking Commission said some remuneration should be deferred for ten years to align rewards with the maturity of risk. Jenkins thinks deferral levels in the UK are already among the highest in the world, making it hard for him "to attract the right talent."
Tyrie responded dryly by saying "it is regrettable that a number of banks appear not to have accepted the need for fundamental reform in this year's bonus round" and that "the new consensus emerging on pay remains seriously flawed." No prizes for guessing who he had in mind.
A year ago, Jenkins was the new-broom boss who would clean up Barclays. Now he appears as powerless as his predecessors to resist the bonus grabs. He is irritating politicians, and possibly the Bank of England too, with his objection to lengthy deferrals. And he can't point to a rising share price to pacify investors. "2014 will be a critical year for Barclays," says Walker. You bet. Another year like 2013 and even the supine shareholders may conclude they're being taken for a ride.
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