Barclays boss 'reforms bonus payments'
Barclays' new boss is to overhaul the way bonuses are paid next month by giving senior staff loan notes that are dependent on the success of the bank, according to a report today.
Chief executive Bob Diamond is considering paying a large proportion of bonuses in special contingent convertible bonds - also known as "cocos" - that are effectively worthless if the bank runs into trouble, the Financial Times said.
Issuing cocos would incentivise staff to ensure the bank is run in a sustainable way and would give the bank extra stability in times of stress, it was claimed.
Meanwhile, the Treasury's negotiations with the UK's biggest banks to hammer out an agreement on bonus payments and levels of lending to small businesses have stalled, and no agreement is now expected this week.
The cocos could be paid to its top 1,000 staff who rank at managing director level and above.
Barclays said no decision has yet been made but it is understood that the bank intends to announce the pay plans when it reports its annual results in mid-February.
Issuing a large amount of bonuses in the form of cocos would be a departure for investment banks, which have reacted to recent criticism of bonuses by increasing the amount of deferred pay and shares handed out.
Bonuses are a hot topic at the moment, as the big banks, including those that have been bailed out, prepare to announce annual rewards packages amid public anger and in the face of Government cutbacks.
Talks between the Treasury and the big five banks - dubbed Project Merlin - were expected to reach an agreement as soon as this week but a decision could now be delayed until next month.
John Varley, until recently chief executive of Barclays, has been leading the industry's involvement in the talks with the Government.
The Treasury said the negotiations were still taking place, but talks have dragged on amid difficulties over finalising lending commitments and because banks are unwilling to cut their bonus levels for the third year in a row.
Banks are believed to be concerned about promising to lend a certain amount to businesses, many of which face further shocks from the economic crisis.
The Government is reportedly keen to ensure any lending goal is stretching enough, and that some concession on bonus handouts is provided by banks.
- 1 Alan Rickman admits editing 'terrible' script with friends in Pizza Hut behind backs of writers on Robin Hood: Prince of Thieves
- 2 18th century sex toy found in 'toilet of sword fighting school' in Poland
- 3 US? China? India? The 10 biggest economies in 2030 will be...
- 4 'I wish my teacher knew...': Young students share their 'heartbreaking' worries in notes
- 5 Rebecca Francis accuses Ricky Gervais of using 'influence' to target female hunters after receiving barrage of death threats
General Election 2015: David Cameron catching up in polls – but he badly needs a clear lead
Alan Rickman admits editing 'terrible' script with friends in Pizza Hut behind backs of writers on Robin Hood: Prince of Thieves
South Africa xenophobic attacks: Shops looted and violence on streets of Johannesburg as foreigners are forced to hide in police stations
18th century sex toy found in 'toilet of sword fighting school' in Poland
'I wish my teacher knew...': Young students share their 'heartbreaking' worries in notes
The only black face in the Ukip manifesto is on the page about overseas aid
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
Ukip is the only main political party to not address LGBT rights in its manifesto
Food banks: One million Britons will soon be using them, according to Trussell Trust
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
iJobs Money & Business
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...
£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...
£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...