Barclays considering bonuses shake-up
By politics.co.uk staff
Bob Diamond’s bank is set to reform its bonuses structure by introducing a new bond, according to a report.
Cash bonuses which have attracted such criticism from politicians would be replaced with contingent convertible bonds (cocos), the Financial Times newspaper reported.
These would be virtually worthless if the bank runs into trouble but lucrative if the bank performed well. They would be paid to Barclays’ top 1,000 bankers.
No final decision has yet been taken, the bank has said, but the FT reported that it has already approached the Financial Services Authority regulator over the proposed changes.
Barclays faces enormous pressure to reform its bonuses regime amid pressure from the government.
Mr Diamond experienced politicians’ anger at the City on a personal level when he appeared before the Commons’ Treasury committee earlier this month.
He defended bankers and said they should no longer be blamed for the financial crisis of 2008, but all parties continue to criticise banks’ inaction in reforming their pay structures.
“We need to have a sustainable and prosperous banking sector where the taxpayer is not liable,” deputy prime minister Nick Clegg told BBC1’s The Andrew Marr Show yesterday.
“The banking system needs to be made safe.”
Barclays’ pay shakeaup could be announced alongside its annual results, which are due within the next month.
