Tags: Antony Jenkins, Barclays, bonuses, death spirals
Choice number one was to cut bonuses for a second year in a row, lose all its investment bankers in the US, and turn the place into a Gold’s Gym. Choice number two was to increase bonuses and stop the mass exodus. After many a sleepless night, CEO Antony Jenkins decided to go with the latter but lest anyone be getting ideas, this was a one time thing. Next year he won’t worry about placating anyone, mass exodus or not, and if you don’t like that you can, as his predecessor’s daughter would say, HHD.
Barclays chief executive Antony Jenkins says he was forced to increase bonus payments to senior executives after hundreds of key staff left the investment bank in America and he feared a “death spiral” could grip the organisation. Revealing the reasons behind the controversial decision to increase bonuses by £200m in 2013 despite profits falling at Barclays, Mr Jenkins said that he had to act or the investment division would suffer. It is thought that as many as 700 staff left the American investment bank, with the “attrition” rate for resignations among senior directors almost doubling from 5pc a year to nearly 10pc after Barclays cut compensation in 2012…
Describing the bonus increase as the “hardest decision” he had to take since becoming chief executive in 2012, Mr Jenkins said that he understood the widespread criticism the bank received but insisted it was “the right thing to do”. He also said the bonus increase would be a “one-off” and, if profits continued to decline, an increase would not be repeated.
Barclays: We paid bonuses to avoid ‘death spiral’ [Telegraph]