BZW chief banks more than pounds 3m
Wednesday 19 March 1997
This is in stark contrast to Barclays' chairman, Andrew Buxton, who received pounds 506,000 in salary and bonuses last year, while the chief executive, Martin Taylor, was paid pounds 820,000.
The bank's annual report, published yesterday, also shows that Mr Harrison was guaranteed an annual bonus of pounds 1.25m payable at the end of this month. He was also paid a third of his pounds 300,000 salary since joining last September.
Mr Harrison's total "emoluments" for the year increased to over pounds 3.1m when share award schemes and pension contributions are included.
A Barclays spokesperson said that most of Mr Harrison's pay package was a one-time cash payment that was the cost of recruiting him and was required to attract a manager of his calibre. The guaranteed bonus was also a one-off.
"It's not that he's going to get pounds 2.9m every year," said the spokesperson. "He's going to get pounds 300,000 plus a bonus."
Mr Harrison's guaranteed minimum bonus for 1997 is pounds 900,000, which is payable by the end of March next year, according to the accounts.
The spokesperson added that Mr Harrison's pay should only be judged against that of his American investment banking rivals, who often get much more.
The figures come against a background of difficult times for BZW. Its pre-tax profits fell 29 per cent to pounds 204m last year as an 18 per cent rise in costs out-stripped revenue growth.
Mr Harrison, former head of investment banking at Flemings, was hired after the death of his predecessor David Band last March. Mr Taylor picked him as the man to lead BZW on to the world stage, where at the moment New York-based "bulge bracket" investment banks like Morgan Stanley and Merrill Lynch dominate.
Mr Band and Mr Taylor had already identified a key obstacle to joining the bigger US rivals, the relative weakness of BZW's markets division. This division includes bonds, derivatives and foreign exchange, and it underperformed last year.
Since his arrival Mr Harrison has embarked on an aggressive and expensive hiring campaign. Bob Diamond, former vice chairman of Credit Suisse First Boston, has been headhunted to lead the markets division. More than 140 new staff have arrived since Mr Diamond joined.
This drive continued yesterday with the top-profile appointment of Roman Schmidt, head of German capital markets at Deutsche Morgan Grenfell, to be BZW's new global head of debt syndicate.
Mr Schmidt is well known in the City as a key player in the European capital markets, and he has just completed six years with Deutsche Bank in Frankfurt. Prior to that he worked at CSFB in London, and he typifies the big appointments Mr Harrison has been making in an attempt to turn the investment bank around.
The downside of this hiring has been that BZW has been forced to let go other employees. Buying these City people out of their contracts added pounds 45m to BZW's wages bill last year.
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