James Moore: Fund managers don't want pay principle to bite back

Outlook If bankers wonder why they get such a hard time, just take a look at Barclays. Last week the bank quietly told contractors that their rates were being cut by 10 per cent, having hiked the bonuses to its investment bankers by, you've guessed it, 10 per cent.

Yesterday it added insult to their injury by revealing that it had handed 12 senior executives nearly £32m in shares.

The contractors were basically told "take it or leave it" by the bank, which says it needs to cut costs after reporting profits down by nearly a third. After such a disappointing performance you might wonder why the money managers at the institutions that own Barclays haven't issued a similarly firm message to Barclays' executives concerning their packages.

But there's a good reason for that. Only a handful of fund managers beat the market over the long term. So they prefer not to kick up too much of a fuss. After all, if they applied the principle to Barclays executives that the bank has applied to its contractors, someone might decide to apply it to them too.