Bob Diamond, the chief executive of Barclays, and its finance director, Chris Lucas, have both volunteered to give up £2.25m of last year's annual bonus if they fail to hit highly demanding targets within three years.
The about-face is seen as a move to placate a shareholder revolt at this month's annual meeting over top bankers' pay at Barclays. But it does not address the main issue which has angered investors:Mr Diamond's £5.75m tax equalisation payout.
Barclays said that it "recognised the strength of opinion expressed by some shareholders" in meetings held over the last few weeks.
Mr Diamond and Mr Lucas will only get the other half of their annual bonus – which is paid in shares – if Barclays' return on capital, which was 6.6 per cent last year, rises above its cost of capital, which was 11.5 per cent last year.
Separately yesterday, Morgan Stanley bankers – more than 5,000 of whom work in Canary Wharf – are in line for bigger pay and bonuses this year as both it and rival Bank of America Merrill Lynch reported better-than-expected first-quarter profits.
Morgan Stanley's net profit was $8.9bn (£5.5bn), compared with $7.8bn a year before. Bank of America made $653m, down from $2bn in the first quarter of 2011. Morgan Stanley's average pay for the three months rose from $69,000 to $74,000.