Burying bad news on Budget day? It's bumper bonuses for Barclays fat cats
Banks 'wildly out of touch with real world'
Barclays handed nine top bosses £40m in shares today, on the day that the Chancellor, George Osborne, warned Britain’s increasingly hard-pressed citizens that there could be no let-up in his austerity programme.
The lion’s share of the bumper payout was handed to the bank’s racehorse-owning head of investment banking, Rich Ricci, who pocketed Barclays shares worth £17.6m, all of which were sold to generate cash.
News of the bumper payouts was smuggled out in an announcement to the London Stock Exchange at 3pm today – less than two hours after the Chancellor had sat down.
The move swiftly led to accusations that the bank was attempting to “bury bad news” at a time when the focus of the media was elsewhere. Chief executive Antony Jenkins received £5.6m in shares, although he kept half of them, while Tom Kalaris, head of Barclays Wealth, whose American arm has been embroiled in a scandal over its business practices, was handed £5.5m.
The outgoing finance director, Chris Lucas, received £1.2m in shares plus a further package of share options at £1 each, worth £1.2m in profit at the 308p price on the day they were awarded.
Barclays failed to dampen the fire by refusing to address the claims directly. However, sources close to the bank insisted that the date of the announcement had been set weeks before Mr Osborne announced the date of his Budget. But that did nothing to stem campaigners’ outrage at both the size of the awards and their timing.
David Hillman, spokesman for the Robin Hood Tax campaign which wants a tax on a bank’s financial transactions to be paid to good causes, said: “A scandal-hit bank attempting to bury news of its grotesque rewards on Budget day is hardly evidence of a reformed financial sector. This tells you all you need to know – banks cannot be trusted to put their own house in order, the Government must intervene to bring them back into line.”
The TUC General Secretary, Frances O’Grady, added: “On the same day that families learn the income squeeze is set to last even longer and nurses, teachers, firefighters and other public servants find out that their pay is to be held back even more, Barclays decides that it’s a good time to announce mega-payouts to its top directors.
“While millions struggle to make ends meet, the banks and the Chancellor – who only a few weeks ago was so desperately keen to stop Europe capping City bonuses – seem wildly out of touch with what is going on in the real world.” Shareholder groups also privately questioned the size of the awards and the way they were announced.
Anger at the bumper bonus packages will heighten the difficulties for Mr Osborne in resisting the EU’s plan to introduce a cap on bankers’ bonuses of 100 per cent of salary or 200 per cent if a “super majority” of shareholders approve. European policymakers were last night finalising the plans, but officials said they would not come in until the middle of 2014 to allow time for countries to complete legal preparations.
The City and the banking industry have warned that the reforms will force salaries higher and restrict their ability to “claw back” pay from bankers if their actions damage their employers. They also warn that it will drive business away from the City. But the plans enjoy widespread public support and the awards threaten to heighten a perception that the banking industry is out of control.
In a statement, Barclays said the awards were for work done in prior years. “The share releases detailed in this announcement include deferred shares awarded from previous years’ annual performance bonuses and, in some cases, vesting of historical long-term incentive plans,” said a spokesman.
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