No bonus for weakest performers at global investment bank

investmentnews.com:

Barclays Plc is planning to hand dozens of the lowest performers within its investment bank no bonus at all, a move that threatens to complicate executives’ efforts to rebuild the advisory unit. 

Executives are also planning to shrink the firmwide bonus pool amid a persistent slump in dealmaking and capital markets activity, according to people familiar with the matter. Junior bankers largely won’t be impacted by the moves and top dealmakers might still see an increase of as much as 10%, the people said, asking not to be identified discussing personnel information.

A Barclays spokesperson declined to comment. 

The brutal bonus round comes at a precarious time for Barclays’s investment bank. In the coming weeks, Chief Executive C.S. Venkatakrishnan is planning to unveil a series of new financial targets for the British bank, which has seen its stock price lag rivals. The firm’s investment bank — and how much capital it consumes relative to other parts of the lender — is expected to be in focus at the investor event. 

For most banks, giving staffers no bonus at all — a process known as getting “zeroed out” or receiving a “goose egg,” a “doughnut” or a “bagel” — is done sparingly and is typically done if a company wants to speed up attrition among its lowest performers. 

But Barclays has had to turn to the practice for large swaths of its investment bankers just as executives have spent months trying to recover from a period of higher-than-usual attrition last year, which saw dozens of bankers depart for rivals. Those moves came after the lender appointed Cathal Deasy and Taylor Wright to run the investment bank. 

After those departures, Deasy and Wright were forced to go on a charm offensive to retain and recruit bankers