Friday 24 January 2020 2:31 pm

Barclays investment bankers face ‘double-digit’ cut to bonus pool

Barclays investment bankers are reportedly facing a double-digit fall in their bonus pool for 2019, as chief executive Jes Stanley pushes for the lender to meet profitability targets amid growing pressure from an activist investor. 

Barclays Investment Bank reported a strong third-quarter performance with a 41 per cent jump in net profit. But the division’s bonus pool is likely to end the year down by mid-teens percentage points, the Financial Times reported, citing people familiar with the plans. 

A Barclays spokesperson declined to comment on pay. 

In 2018, the bank’s bonus pool grew for the first time since 2013, climbing nine per cent to £1.65bn.

But in the first half of 2019 Barclays cut the amount set aside for bonuses by almost a quarter to the lowest level since 2016.

The cut came as part of a push by Staley to stay on track to meet a targeted nine per cent annual return on tangible equity for the group.

“We are not asking people to get slaughtered, but it will be noticeable,” a source familiar with the plans told the FT. 

“We underpaid in 2017 and made up a lot of that ground in 2018 under Tim Throsby, and now we are obviously asking for some of that back.”

Throsby was ousted as de facto head of the investment banking unit last year after he clashed with Staley, in part over the degree to which the lender should cut bonuses to meet profitability targets, according to the FT.

The division has come under pressure from Edward Bramson, one of Barclays top-five shareholders via his Sherborne investment vehicle, who has called for swaths of the previously-struggling unit to be axed.

Although the unit has been outperforming European peers, it remains considerably less profitable than Barclays’ other businesses, leading to calls from some investors for it to be scaled back. 

Bramson, who unsuccessfully tried to force his way on to Barclays’ board last year, has described its investment bank as “a black box with too much leverage”.