BarCap puts up salaries as bonuses fall

BARCLAYS Capital is planning to significantly crank up the basic pay it gives its 22,000 investment bankers in a move to keep pace with salary hikes from competitors.<br /><br />The bank is said to be preparing salary rises of up to 150 per cent, with the cap on basic pay to increase from &pound;120,000 to &pound;300,000 a year. <br /><br />BarCap, headed by Bob Diamond, refused to confirm the figures, although it said certain salaries would increase more than others. Pay will be backdated to no earlier than June this year.<br /><br />It is understood the greatest benefits will be felt by junior and mid-level staff, as well as those working in back office roles such as IT. <br /><br />BarCap is overhauling its salary structure after losing out in the recruitment field to the likes of Goldman Sachs, which sparked a row by paying its employees 46 per cent more year-on-year after a $3.1bn (&pound;1.9bn) third quarter profit.<br /><br />As a result of the pay review the proportion of BarCap salaries paid in the form of bonuses will decrease. <br /><br />However, this is said to be a reflection of a wider industry trend rather than a reaction to the populist backlash against bankers&rsquo; remuneration.<br /><br />Paying higher salaries is seen by some as a way of circumventing the increasing regulation of bonuses.<br /><br />Barclays&rsquo; Diamond, who has netted a windfall himself recently through the sale of his stake in Barclays Global Investors, has defended&nbsp; the bank&rsquo;s&nbsp; right to pay bonuses and competitive bonuses.<br /><br />Instead of taking government funding during the depths of the credit crunch the bank&rsquo;s management looked to attract funding from the Middle East in an effort to boost its capital ratios.<br /><br />BarCap has been in an expansionist mood recently, hiring freely from its competitors and making good returns on its acquisition of Lehman in the US.