THE 50p top tax rate makes it harder to retain talent in London, Barclays chairman Marcus Agius told City A.M. yesterday.
He also said the bank’s “regretted losses” – staff that it has lost despite efforts to prevent them leaving – have risen, adding: “Competition for talent is fierce.”
UK banks face a particularly difficult struggle to keep the best staff as a high-tax environment in Britain comes on top of the barrage of EU bonus regulations introduced in January.
At the bank’s results presentation yesterday, chief executive Bob Diamond said that he welcomed the government’s commitment to “a level playing field” in regulatory terms.
But he admitted that the field was not level on pay regulation. “It’s difficult to manage, but if you have enough rules like that, it can put you at a competitive disadvantage,” he said, adding that the US has yet to unveil its own pay rules.
Barclays yesterday confirmed that it is to pay a portion of bonuses in contingent convertible bonds (co-cos) that will turn into equity if the bank’s capital ratio falls too low.
Overall pay was down seven per cent, and 12 per cent at Barclays Capital, the investment bank.
Barclays’ shares made a strong showing yesterday gaining 3.9 per cent to close at 325.6p, after the bank revealed a 32 per cent rise in pre-tax profit for 2010 to £6.1bn. A final dividend of 2.5p was proposed making 5.5p for the year. Other banks were also buoyed by its results: RBS rose two per cent to 45.2p and Lloyds rose 1.9p