Banking giant Barclays has increased salaries for employees but reduced bonuses despite pre-tax profits rising by 32% to £6.1 billion in 2010.
Its financial results for the 12 months to 31 December 2010 showed performance awards at a group level in 2010 were down 7% on 2009. Meanwhile such awards for employees working at Barclays Capital dropped by 12%.
These performance awards include all elements that relate to 2010 performance, excluding salaries and performance awards deferred from prior years, but including awards deferred to future years.
They also include other current year contractual awards (such as guarantees, commitments, commissions and new long-term incentive plan awards). †For the first time, Barclays has introduced a contingent capital plan as a part of deferred compensation arrangements for all senior staff. Under the plan, payment of awards is deferred over three years and is only made if the group’s core tier one capital position at the point of vesting is at least 7%.
Barclays has also expanded significantly the number of staff subject to 60% deferral of 2010 performance awards beyond those required by the Financial Services Authority’s remuneration code.
Bob Diamond, chief executive of Barclays, said: “We are committed to demonstrating we are both responsible in our compensation decisions and practices and that we take our regulatory obligations and UK government commitments seriously. In particular, our overall performance awards for 2010 have been directly influenced by the commitments that we have made under Project Merlin.
“In reaching our final decisions, we have had to balance carefully these obligations with our need to ensure our decisions are commercial in a highly competitive global environment and with the requirements of our shareholders.
“We welcome the UK government’s commitment to ensure London remains a leading financial centre and the competitiveness of the financial firms based in the UK, in particular by ensuring those firms are able to compete on a level playing field.”
However, the bank’s staff costs increased by 20%. This was driven by a 13% increase in salaries and accrued performance costs, as well as increases in share-based payments.
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