Morning Coffee: Barclays’ banker with a $4m salary is safe for the moment. The big hedge fund where the drama is putting off candidates

efinancialcareers.com:

There are a number of reasons why London bankers never got particularly excited about the post Brexit decision to remove the European regulation which capped bonuses at two times basic salary.  One of them is that it happened in 2023, a year in which bonuses of zero times basic salary were significantly more common.  And another is that some major employers like Barclays are keeping the cap anyway.

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The bank revealed this in its annual report, but it was confirmed in a letter sent yesterday to shareholders by Nigel Higgins, the Barclays chair. Higgins wrote that having kept the 2:1 ratio in place for 2023, Barclays' remuneration committee will contemplate lifting it in 2024.  But he says that “Whether or not the company changes the cap in the future, pay across the group will continue to be managed in line with Barclays’ remuneration philosophy, which includes a focus on rewarding sustainable performance”. 

The word “sustainable”, in context, usually means that there’s no enthusiasm for doing anything that will affect the group cost base too much; it might even imply that Barclays aims to manage thebonus pool to revenue ratio downward.  The policy doesn’t apply to members of the Group Executive Committee, but their compensation tends to be weighted much more heavily to long term and deferred awards, and is also subject to clawbacks which can be quite rigorously enforced. 

This shouldn’t come as too much of a surprise.  When the bonus cap was originally put in place, banks within its purview tried to keep their overall pay competitive by raising basic salaries. Some Barclays people are now on very high salaries as a result. 

According to the bank's most recent