The method by which BZW exploits loopholes to avoid paying national insurance on these bonuses was also criticised. Such schemes are seen as 'most provocative' by the Department of Social Security.
The big payments reflect booming conditions in BZW's markets last year, caused by a combination of falling interest rates and buoyant securities markets. The seven BZW directors' remuneration far exceeded that of Barclays' own recently appointed chief executive, Martin Taylor. He is getting paid pounds 737,000 including performance- related bonuses.
The head of BZW's money markets division, Dennis Rooke, headed the list with pounds 1.5m. David Band, BZW's chief executive, received pounds 1.4m while five other divisional heads received bonuses that pushed their total pay over pounds 1m.
BZW also manages to reduce its National Insurance costs by paying the bonus money to an insurance company, which in turn pays it into life assurance policies. When the policies repay the bonuses BZW does not have to declare them as remuneration, and avoids paying NI.
Brian Friedman, head of employee contributions and benefits at the accountants Arthur Andersen, said: 'Such schemes are seen by the DSS as aggressive, so you have to take great care in structuring them.' He said such schemes were common in the City, and might be banned in the next Budget. 'It's clearly something the DSS is keeping its eye on.'
Rob MacGregor, of the Banking Insurance and Finance Union, said: 'We think that it's absolutely outrageous that within days of sacking 432 people in London and the South-east, and with 5,000 more jobs to go this year, they are making payouts like this to BZW directors.'
He said it was unfair that the clearing bank staff should shoulder the burden of pounds 1.8bn in bad debt provisions, incurred by senior executives lending to the likes of Robert Maxwell, Heron and the property developer Imry.Reuse content