The Daily Telegraph reports that Barclays Capital is set to announce that it is increasing its salary bands, and that some bankers could see their base pay increase by 150% - from £120,000 ($200,000) to £300,000 ($500,000).
According to the newspaper, the pay awards will also be backdated to June. The alleged move comes at a time when many firms are reviewing their compensation policies in the light of the global clampdown on banker bonuses, which are regarded as a major cause of the recent financial crisis. Several financial institutions are now re-balancing pay and placing a greater emphasis on base salaries in reward packages.
In the meantime, The Times reports that the board over at Royal Bank of Scotland are thought to be preparing to resign in the event that the UK Treasury vetoes its plan to pay some $2.5bn in bonuses this year-end. The newspaper quotes Ronnie Fox, from Fox Lawyers, who said: If you are put in a position where you can no longer do the job you are paid to do, then I cannot see how you can remain in place as a director'.
The bank paid out some $1.66bn in bonuses last year, and UK Chancellor Alastair Darling has said that he doesn't expect any major increase this year. Many commentators are saying, however, that the bank should be left alone to pay what it needs to retain key staff. The bulk of the bonus payouts would go to the bank's Global Banking & Markets unit, which has had a good year and is seen as key to RBS's long-term profitability, and its ability to repay the UK taxpayer.
Vic Daniels from Here Is The City said: 'This is just another example of why government should never run a bank. RBS is not paying any cash bonuses to staff who earn more than $65,000 this year, and this is a sensible move designed to prevent short-term risk taking on the part of traders and other employees. But to put the bank at a competitive disadvantage by scrimping on bonuses is just a political ploy to win votes, and not a decision made with the long-term interest of the bank in mind. Sadly, this Labour government is thinking more about its own re-election prospects than it is about trying to get taxpayer money repaid as quickly as possible'.
Out of interest, Moneymarketing.com reports that City Minister Lord Myners told the House of Lords earlier this week that he estimates that around 5,000 UK-based bankers will receive bonuses of over £1m ($1.66m) this year, unless the government does something to prevent it.
Finally, The Wall Street Journal reports that Goldman Sachs has begun to meet with large investors 'in an effort to ward off an investor backlash over its record compensation pool'. Goldman staff are expected to receive, on average, around $700,000 each this year-end.
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