Barclays, RBS payouts spark fresh outrage
Bank wants to pay chief massive bonus despite year of scandals
BRITAIN may be on the brink of a triple-dip recession but it appears to be business as normal at the big banks, who are keen to pay million-pound bonuses to top executives despite a series of scandals.
It was revealed today that Barclays is talking to "key shareholders" about its plan to award a bonus of up to £2.75m to new boss Antony Jenkins. The payment follows the £290m fine imposed on Barclays for its role in the Libor rate-fixing affair that claimed the job of Jenkins's predecessor Bob Diamond. The bank is also being forced to set aside a further £1bn for mis-selling insurance.
The Daily Mail called the payment to Jenkins "shameless" and said Barclays should not be paying such a large sum after its name was "dragged through the mud" last year.
Jenkins's proposed bonus comes at an interesting time, says The Guardian, because Sir John Sunderland, head of Barclays' remuneration committee, will today face a "grilling" from MPs and peers at the banking standards commission.
It follows yesterday's news that RBS – which is 82 per cent owned by the government after a taxpayer bailout – is to pay £250m in bonuses to executives in its investment banking division. The bank is also preparing to settle a Libor-related fine of at least £500m and there were calls today for chancellor George Osborne to "intervene" before the perks are paid.
Meanwhile Lloyds boss Antonio Horta-Osorio is in line for a £2.3m payout, despite his bank being 41 per cent taxpayer-owned. The Daily Mirror said the lavish bonuses should not be paid while "millions of families still suffer" from the lingering effects of the financial crisis which "reckless banks plunged us into".
Jenkins may be anticipating a big payday – his bonus would be awarded on top of his £1.1m salary – but The Times reports that there are calls from some of Barclays biggest shareholders to "claw back" bonuses paid to him when he was the head of its retail banking and credit card divisions. Those parts of the bank are "now known to have mis-sold insurance to thousands of customers", the paper says.
Executive pay has become a "toxic issue" at Barclays, which faced a revolt of almost 32 per cent of voting shareholders at last year's AGM over Diamond's 2011 package, which was believed to total £17m.
News of the latest round of big bonuses prompted shadow City minister Chris Leslie to call for the reimposition of the 50 per cent tax on bank bonuses applied by Labour between December 2009 and April 2010. Leslie said revenue from the tax should be used to guarantee a "job for young people out of work".