More on bonuses, but not the controversial bungling-banker-bung type…
Managers at Barclays – across the whole bank, not just BarCap – have been told that payment of their cash bonuses will henceforth be delayed for up to 24 months.
Payments will be made in three stages – first 50 per cent, followed by two further payments of 25 per cent apiece. As compensation Barclays will pay staff 10 per cent interest on the deferred bonuses, which will be added to the final payment.
The scheme is called the Long Term Cash Plan, but clearly has the rather short term effect of cutting the outflow of cash.
We’re not sure what proportion of Barclay’s total £7.6bn staff bill this covers, but the number is assumed to be significant. And 10 per cent is a chunky coupon for two year money.
Some 15,000 senior staff are affected.
It may be that the bank thinks this ploy will help address the PR issue over remuneration in the banking sector. The scheme is being sold as a retention plan – with the interest payment dubbed a “service credit” – but that’s not how Barclays managers see it.
Related links:
Barclays 2006 results statement
Barclays bankers braced for bonus cuts – FT