Pay rises while profits slide at the City's banking giants
Banks headed into another storm of controversy over wages last night as it emerged that Standard Chartered had quietly increased its total pay pot despite a sharp slide in profits, while Barclays, whose profits also fell, admitted 481 employees earned more than £1m last year. Eight of the Barclays executives earned more than £5m.
Lloyds and Barclays, meanwhile, said they were paying their chief executives almost £1m each in shares in 2014 to compensate them for the EU-imposed bonus cap. The two banks also onfirmed they would be seeking shareholder approval to pay bonuses of two-times salary.
Total staff pay at Standard Chartered rose in 2013, despite an 11 per cent slide in profits, an analysis of the bank's accounts by The Independent has revealed.
The Asia-focused bank confirmed yesterday that its profits declined last year for the first time in a decade, slipping to $6bn (£3.75bn), down from $6.9bn in 2012, after suffering heavy write-downs in its South Korean operations.
Stressing that pay is linked to performance, Standard Chartered chief executive Peter Sands said the bonus pool for staff would be slashed 15 per cent to $1.21bn to reflect the "tough" year. Mr Sands' own bonus would be cut by 21 per cent to $2.5m (£1.6m).
But staff pay across the bank actually increased by 2.1 per cent on 2012, casting doubt on the claim that pay is tracking performance.
Wages and salaries including bonuses rose from $4.87bn to $4.9bn. The number of bank staff in 2013 rose to 88,257, up from 87,569 in 2012. This implies average pay per employee rose from $55,693 to $56,449. Aggregate "salaries, allowances and benefits in kind" of senior directors rose to $25m (up from $21m in 2012). This offset a $3m fall in bonuses (which came down from $10m in 2012 to $7m).
A spokesman said inflation in the Far East, where Standard Chartered employs many of its workers, pushed up the overall pay bill and stressed bonus figures included in the report also included previous years' awards that vested in 2013. Standard Chartered intends to follow HSBC with a share-based allowance scheme to boost fixed pay of top employees despite the EU's incoming cap limiting bonuses to 200 per cent of salary. Mr Sands said this was necessary to retain talent and stop losing staff to rival banks.
By unveiling a cut in bonuses yesterday, Standard Chartered had hoped to distinguish itself from Barclays, which has come under intense criticism for increasing the bonus pot of its investment bankers for 2013 by 13 per cent, despite a 37 per cent fall in the unit's profits. Barclays' annual report yesterday also showed that chief executive Antony Jenkins was awarded £4.4m worth of shares as part of his "2013-15 long-term incentive plan" last March.
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