Chris Blackhurst: The City may sneer at Barclays boss waiving a £2.7m bonus, but Antony Jenkins is the one in tune with the public's mood

Midweek View: Nobody knows what the future will bring. To write off millions in the hand is a brave call
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The Independent Online

All hail Antony Jenkins. For the second year in a row, Barclays' chief executive is waiving his annual bonus. In doing so, Mr Jenkins stands alone, the only one of the City's senior bankers to correctly gauge the political and public mood. Within the City, as you might expect, there is plenty of sniping in Mr Jenkins' direction.

He's a dry-as-dust technocrat, apparently, a textbook manager rather than a true leader of men. He's not one of the boys, not like Bob Diamond, his predecessor. Now, Bob, he really was a diamond, in every sense of the word. He knew the markets, loved the trading floor. Top fella, he was.

In which case, give me Mr Jenkins any day. Because what the diamond geezer left the new man was a giant pile of, there's no point in searching for a politer word, poo.

The bank was reeling from the Libor-rigging scandal that cost Barclays £290m in fines and Mr Diamond and chairman Marcus Agius their jobs. This was the one where an external trader sent a pal at Barclays a thank you email: "Dude. I owe you big time! Come over one day after work and I'm opening a bottle of Bollinger."

Barclays was also up to its neck in payment protection insurance mis-selling, and the bank was immersed in allegations it manipulated the Californian energy market. Not for nothing did Mr Jenkins, in refusing his pay-out, refer to "legacy litigation and conduct issues". That fallout shows no sign of diminishing in the year ahead. In all likelihood it is going to get a whole lot worse for Barclays. The rumour-mill is humming with talk about what may amount to the City's most high-profile criminal prosecution since the Guinness and Maxwell cases.

I refer to the continuing Serious Fraud Office investigation into Barclays' attempt to stave off going to the Government cap in hand to be rescued in 2008. Rather than fall under the control of politicians, the bank pulled off a coup by persuading Middle East investors to stump up the cash instead.

Except we now know that the £4.6bn Gulf bailout was accompanied by hidden payments from Barclays to its Arab friends of more than £300m. The money was billed as "advisory fees".

The Financial Conduct Authority has taken a look already, and indicated it will fine Barclays £50m for failing to disclose the transfers. But the FCA is only part of it – more pertinently, the Serious Fraud Office, the US Department of Justice and the US Securities and Exchange Commission are crawling all over the deal to see if the cash was tantamount to a bribe.

Barclays had revealed that the Financial Services Authority, precursor to the FCA, was investigating "four current and former senior employees, including [then finance director] Chris Lucas". Others who are under investigation include Roger Jenkins, who found the Gulf backers for the bank, and John Varley, its then CEO.

Behind the scenes in the City a drama is raging as the SFO, in particular, shows no sign of backing off. Indeed, its new boss, David Green, is thought to regard the affair as a test case for his organisation. He's sought extra cash from the Treasury to pay for the inquiry, which has seen more than 20 witnesses being interviewed.

One hold-up has presented itself in the form of Clifford Chance. The law firm, which advises Barclays, is understood to be claiming client privilege and refusing to disclose what it told the bank.

Mr Jenkins, the CEO, is of course fully aware of what is unfolding. The damage to the bank from the resulting publicity if charges are brought will be enormous. It puts into context recent moves by the bank, to end the Boris Bikes and Premier League sponsorships for instance, all intended at withdrawing Barclays from the limelight, and putting distance between the present and past regimes.

It's "legacy litigation", to use the current CEO's phrase, that could haunt the bank for years to come and, perhaps not surprisingly, he's decided that accepting a bonus against that backdrop is simply not on.

Nevertheless, he deserves praise. It's easy to dismiss his foregoing a bonus as a gimmick, as commercial pragmatism. Indeed, this is what was said when he took charge in January last year. One of his first acts was to send all 140,000 Barclays employees an email, inviting them to embrace his TRANSFORM programme, with its five core values of "respect, integrity, service, excellence and stewardship". He said: "There might be some who don't feel they can fully buy into an approach which so squarely links performance to the upholding of our values. My message to those people is simply: Barclays is not the place for you. The rules have changed. You won't feel comfortable at Barclays and, to be frank, we won't feel comfortable with you as colleagues."

What was the response of the City to his missive? A collective sneer was the politest (I leave it to you to imagine some of the gestures that were made in Mr Jenkins' direction in the Square Mile's bars). Partly, it was based on the fact that we'd been here before, that Barclays has long professed to hold such standards dear, from the principles laid down by its 17th-century Quaker founders to the six "Barclays Behaviours" promulgated in 2002 as ideals for the bank's staff under its then chief, Mr Varley.

The difference between then and now is that Mr Jenkins realises such initiatives only begin to work if those at the top are seen to be adhering to the same code. Under Mr Varley and then with Mr Diamond, Barclays may have had its "behaviours" but there was not much sense of fundamental change.

The new CEO seems determined to set an example. There is an argument that says he is going too far, that people will not want to work for a company where the chief is permanently clothed in a hair-shirt. That's the risk he takes, but taking a bonus at this juncture is a far worse option.

Still, it must be tough. Mr Jenkins has kissed goodbye to £2.7m. It's true that he earns a base of £1.1m and is in line for a long-term incentive plan that could net him £4.4m after five years, provided he breaks his targets.

But nobody knows what the future will bring. To write off £2.7m in the hand is a brave call.

If only others followed suit. The contrast between Mr Jenkins and his counterparts, all of whom preside over organisations that have experienced enormous reputational, let alone financial, damage, is stark.

They plough on regardless, busy inventing ways round the incoming bonus cap. The latest is the payment of cash or share "allowances" to senior employees, in addition to their salaries. They can be adjusted up and down each year according to performance, so, unlike salaries that must be paid, they are not a fixed cost.

Other wheezes are changing job contracts so that those hit by the bonus cap are no longer technically employed by a bank so they can avoid the new rules which are aimed squarely at banks; and turning the bonus into a loan which would only be repaid if a banker left. Both these are likely to fall foul of regulators.

The "allowances" scheme, though, is more difficult to ban and is likely to become the popular method for avoiding the restriction on bonuses.

So they remain quids in, while Mr Jenkins chooses not to be. But for all their cleverness and supposed sophistication, only one bank boss is in tune with the zeitgeist. Who might that be?