Barclays has recently increased the bonus cap for its top executives, according to an internal memo obtained by Reuters on Thursday. The bank's senior employees can now receive bonuses up to ten times their base salary, a significant increase from the two-to-one ratio set by the European Union in 2014 when the UK was still a member.
"The updated bonus cap does not change how Barclays determines its incentive pool, which is tied to overall Group performance," stated a bank spokesperson, who verified the memo's contents. "This adjustment provides us with enhanced ability to vary individual bonuses within a specific and limited group of colleagues," he further explained.
This modification only affects material risk takers (MRTs), a regulatory category of employees whose actions can significantly influence the firm. It does not apply to MRTs in Barclays' Irish-based entity overseeing its European operations, who continue to adhere to the EU cap, as mentioned in the memo. Other banks like Goldman Sachs and JPMorgan have also altered their variable compensation schemes for their top UK-based bankers.
Barclays' shareholders approved the bank's proposal to revise the cap during this year's shareholder meeting. The EU initially imposed these pay restrictions to limit excessive risk-taking in banks post-2008 financial crisis. Last October, UK financial regulators affirmed they would grant supervised banks more freedom to offer higher bonuses, aiming to bolster the competitiveness of the nation's financial sector.
