Barclays has defended its lucrative executive bonuses as a necessary part of running a global investment bank. The bank’s chief executive, Antony Jenkins, is preparing to explain to critics the importance of large bonus payments to the company’s rising number of executives paid in excess of £1 million a year.
The institution’s latest annual report will soon be released, revealing that the total number of executives paid in excess of £1 million has substantially increased from the 428 on staff in 2013. The report will also reveal an increase in the number of bank executives paid at least £5 million per year – admittedly, a small number.
Jenkins’ defence of Barclays’ lucrative payouts may seem odd for those familiar with his history at the bank. In 2012, he stated that it was essential that the bank lowered its cost-to-income ratio in order to remain competitive. In the last two years, profits have not increased while bonuses have continued to rise.
Despite admitting that the decision to increase compensation to executives this year was the “toughest” he has made during his Barclays career, Jenkins defended raising bonuses as necessary for running a competitive bank. In The Telegraph, the decision was defended as important for Britain’s future as a global banking sector.
With Royal Bank of Scotland scaling down its international activities and focusing on business within the UK, Barclays’ role has increased. Without a leading position in the United States – and all the pay packages that this role entails – the UK could be left without a significant international bank headquartered within its borders.
In an interview with The Telegraph, Jenkins made his thoughts clear: “I don’t think the anger around investment banking in the UK should guide our strategic decision making.”
Analysts believe that Barclays aims at becoming Britain’s global investment bank, competing with US-based firms such as Citigroup and JP Morgan.