Barclays 'must revamp overly generous pay policies,' report finds

Lawyer Anthony Salz calls for Barclays to bolster its board, strengthen its human resources function and ensure pay is linked to the 'long-term success of the institution'

Barclays must go further in overhauling its pay practices after a culture of "overly generous" bonuses put profit first in the run-up to the bank's Libor scandal, an independent review found today.

A report by top lawyer Anthony Salz, who was commissioned to look at the bank's culture following its £290 million Libor settlement last year, found Barclays became "too complex to manage" and that excessive pay and bonuses saw some bankers believe they were "unaffected by the rules".

In the 24-page report, which follows more than 600 interviews over eight months, Mr Salz calls for Barclays to bolster its board, strengthen its human resources function and ensure pay is linked to the "long-term success of the institution".

He said Barclays has already taken steps to revamp its pay policies and culture, but added that more needed to be done.

"If Barclays is to achieve a material improvement in its reputation, it will need to continue to make changes to its top levels of pay so as to reflect talent and contribution more realistically, and in ways that mean something to the general public," the report said.

"We also feel that there is more that it can do over time to emphasise forms of recognition for performance other than pay," it added.

Sir David Walker, chairman of Barclays, admitted the report made for "uncomfortable reading".

He said: "That is bound to be the case when one asks for an independent examination of this kind, and we must learn from the findings."

The Salz Review revealed the bank's investment banking arm paid out an average of £170 million a year between 2002 and 2009 under its long-term incentive scheme - on top of salary and annual bonuses.

It said there were "a number of design issues" with the long-term bonus plan, with targets that were too easy to achieve.

While Barclays has recently announced changes to its bonus plans, the review raised concerns that its long-term schemes were still too complex.

It also said there were worries over bonuses for those in so-called control functions - such as risk management - and recommended increasing fixed pay instead to avoid conflicts of interest.

In opening remarks to the report, Mr Salz said: "Despite its turbulent recent history, Barclays has emerged from the financial crisis, somewhat against the odds, as one of the world's leading banks. But this has been achieved at a cost.

"Significant failings developed in the organisation as it grew. The absence of a common purpose or common set of values has led to conduct problems, reputational damage and a loss of public trust."

The report concludes that Barclays is committed to putting the "deeply disappointing chapter" in its history behind it.

But Mr Salz added: "Changing an organisation as large as Barclays will not be easy. It will require perseverance, consistency and implementation at all levels of leadership. And it will take time."

Barclays plans to report back on the Salz Review before its annual general meeting on April 25.

Frances O'Grady, general secretary of the TUC, said: "Anthony Salz is right to call for banks to take action, but we won't be holding our breath.

"What is needed is for the Government to implement the EU's call for curbs on executive pay, but George Osborne seems more interested in protecting the lifestyles of his friends in theCity."

PA

Voices
On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
scotland decidesIs a huge gamble on oil keeping First Minister up at night?
Arts and Entertainment
Rosalind Buckland, the inspiration for Cider with Rosie died this week
booksBut what is it like to be the person who inspires a classic work of art?
Life and Style
techApple has just launched its latest mobile operating software – so what should you do first?
News
A male driver reverses his Vauxhall Astra from a tow truck
newsThe 'extremely dangerous' attempt to avoid being impounded has been heavily criticised
PROMOTED VIDEO
Arts and Entertainment
Lionel Messi in action for Barcelona
filmSo what makes the little man tick?
Arts and Entertainment
tvReview: An undercooked end (spoiler alert)
News
i100
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Pharrell dismissed the controversy surrounding
musicThe singer said 'the last thing I want to do is degrade'
Sport
Cesc Fabregas celebrates his first Chelsea goal
footballChelsea vs Schalke match report
Arts and Entertainment
Toby Jones (left) and Mackenzie Crook in BBC4’s new comedy The Detectorists
tvMackenzie Crook's 'Detectorists' makes the hobby look 'dysfunctional', they say
Life and Style
fashion

Olympic diver has made his modelling debut for Adidas

News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Recruitment Consultant - Soho - IT, Pharma, Public Sector

£20000 - £25000 per annum + OTE £35,000 first year: SThree: The SThree group i...

Sales Executive

£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week