Barclays defends bonus scheme to secure top talent

Chief Antony Jenkins claims being a third-tier payer damages the brand

Barclays is set to announce that almost 500 of its bankers received more than £1 million each last year as it battled to prevent poaching by rival banks.

The bank has already faced criticism when it revealed last month that the bonus pool for its investment bank had risen by £200 million to £1.6 billion despite a 37 per cent slide in profits.

Chief executive Antony Jenkins, who turned down his own annual bonus for last year but will shortly receive shares worth about £1 million, said the bank was forced to increase bonuses, mainly to its US investment bankers, to avoid a “death spiral” in the business.

It is believed that last year as many as 700 staff quit the US investment bank, created from the New York business of Lehman Brothers — twice as many as the year before.

"People are less attracted to come to you, both clients and employees," Jenkins told the Daily Telegraph. "You get into something of a death spiral. Your brand deteriorates, and you can move very quickly from being a first-tier player to one in the second or third tier if you don’t protect the franchise."

Lloyds Banking Group also revealed today that it paid only 27 staff more than 1 million (£820,000) last year. Unlike Barclays it does not run a huge investment bank. Chief executive Antonio Horta-Osorio received a £1.7 million bonus on top of his basic £1 million salary and £500,000-plus pension benefit.