Barclays told to rein in top pay to regain trust

Marion Dakers

AN AIR of arrogance at Barclays fuelled by pay structures that put profit ahead of customers were to blame for a string of failings that included attempts to rig Libor, a report into its corporate culture concluded yesterday.

Barclays revenues by business

The report by Anthony Salz, commissioned after boss Bob Diamond departed in July, found that Barclays’ rapid expansion in the decade leading up to the financial crisis had left the bank with a drive to “win at all costs”.

Salz largely backed the reforms already being pushed through by the new management team, led by chief executive and former head of the retail bank Antony Jenkins.

Chairman Sir David Walker said yesterday the report “makes for uncomfortable reading in parts” but that Salz’s findings “substantially aligned with work already progressing”.

Salz said that pay at the bank broadly reflected the rest of the industry, though a group of 70 top staff were awarded disproportionately large sums that were not always linked to performance.

He said pay should be reformed to improve the bank’s reputation and attitude towards risk.

Salz also criticised what he saw as Barclays’ distant relations with shareholders, and recommended that the bank be more transparent with investors and the public.

His 34 recommendations also included giving non-executive directors more scope to watch over the company, and working towards a uniform culture across the bank’s divisions.

Part of the problem, he said, was an aggressive culture at the investment bank, where the firm makes 40 per cent of its revenues, influencing the rest of the organisation.

The report cost Barclays £17m.


  • The bank’s culture after a decade of rapid expansion “tended to favour transactions over relationships, the short term over sustainability, and financial over other business purposes”, said Salz.
  • Pay structures at Barclays “gave the message to staff that the bank valued revenue over customer service” and as a result “a few investment bankers seemed to lose a sense of proportion and humility”.
  • “We believe a culture developed within Barclays, quite possibly derived originally from the investment bank, which came across to some as being ‘clever’ or what some people have termed ‘too clever by half’, even arrogant and aggressive.”
  • The bank’s structured capital markets arm, which is being dismantled, “operated in an inherently risky business dependent on the interpretation of the relevant tax legislation”.
  • While pay for most staff at the group is in line with the rest of the industry, Salz singled out firm’s “70 or so most senior or highly-paid executives” as having disproportionate rewards.
  • Management were ill-equipped to deal with bad news, Salz said. “This all combined to create an environment in which leaders were rarely effectively tested or challenged, contributing to a sense of ambiguity about what was considered right and wrong.”