Barclays Plans to Boost Investment Bank Bonuses by More Than 25%
Barclays Plc is planning to boost bonuses at its corporate and investment bank by more than a quarter amid record results and intense competition for top talent, a person familiar with the bank’s plans said.
The increase would be a significant shift from 2020, when payouts rose by about 10%, Bloomberg News reported at that time. The number discussed is preliminary and a final decision hasn’t been taken yet, the person said. A spokesperson for the British lender declined to comment.
Lenders across the U.S. and Europe have seen profits surge at their investment banking units this year, with deal making at record levels. Banks are starting to signal that bonuses will rise as a result.
Deutsche Bank AG, another European lender with a sizable investment banking operation, is considering upping variable compensation at its dealmaking and underwriting unit by as much as 20%, people familiar with the matter said. A more muted increase is also under discussion, and no final decision has been made, the people said, asking not to be identified discussing private information. A spokesperson at the German lender declined to comment.
Goldman Sachs Group Inc. and JPMorgan Chase & Co. are considering boosting bonus pools for their underwriting and deal advisory units by 50% and 40%, respectively, Bloomberg News has reported. Fixed-income traders at those firms will probably see variable compensation stagnate as their business normalizes from last year’s lucrative trading environment.
Barclays doesn’t break out the bonus pool for the unit in its filings. Total incentive awards granted for the entire firm was 1.6 billion pounds ($2.1 billion) including deferred bonuses in 2020, broadly unchanged from the previous year. The lender said that it put aside 365 million pounds more in the nine months to September for performance costs compared to the same period last year, according to an October presentation.
“Variable compensation, or the bonus pool, that’s very much tied to the performance of the corporate and the investment bank and I think you’ll see variable compensation higher this year given that they’ve generated record profits,” then-Chief Executive Officer Jes Staley said on Bloomberg Television in October.
The British lender’s corporate and investment bank leadership has recently been reshuffled after Staley’s abrupt departure last month. New CEO C.S. Venkatakrishnan -- who co-headed the division before being promoted -- appointed Paul Compton as its sole head last month. Stephen Dainton was named co-head of global markets alongside Adeel Khan.
The divisions are the biggest revenue contributors at both firms. At Barclays, investment banking fees were are up 37% in the first nine months of the year even as markets revenue dipped 14% as trading levels normalized post-pandemic, bank filings show. Deutsche Bank’s investment bank increased pretax profit by 32% in the first nine months of the year and the lender has repeatedly upgraded its outlook for the division since the beginning of the year.
Deutsche Bank’s investment banking head Mark Fedorcik told Bloomberg in a recent interview that compensation in his unit would be “commensurate with performance and market.” He also said that “demand for talent is the highest I’ve ever seen.”
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