Ex-Barclays Banker Feared Bonus Cut During Financial Crash
Former Barclays Plc executive Roger Jenkins joked that he cared more about his bonus than the lender’s future as the business came close to crumbling at the height of the 2008 financial crisis.
Jenkins was questioned in a London court Thursday by prosecutor Ed Brown, who played a phone call recording between Jenkins, fellow defendant Richard Boath and Jeff Weiss, then global head of Barclays’ financial institutions. The bankers discussed what might happen to their pay if the U.K. government took over the bank, at a time where nationalization was becoming a likely scenario.
Jenkins, Boath and another former executive, Tom Kalaris, are on trial in London over allegations that they orchestrated 322 million pounds ($421 million) in hidden fees paid to Qatar in exchange for investing in Barclays. They deny the charges. Weiss hasn’t been accused of any wrongdoing.
“You were joking about your bonuses when the financial world was crumbling around you,” Brown said. “Was your approach to banking that Roger Jenkins is No. 1 here? It’s ‘I’m looking after myself in this world of high finance’ and in your words, ‘I don’t give a f**k about the bank.’”
Jenkins dismissed Brown’s questioning, although he was obviously disturbed by it.
“It’s a mindset that you have to adopt to enable you to negotiate well otherwise you get emotional,” Jenkins said. “I had a heart attack on Aug. 5 and was instructed to get out of my bed, leave family on Aug. 29 and come back to work to help this bank survive. I don’t think I have to answer the question.”
Qatar invested 4 billion pounds in Barclays as part of capital raisings in June and October 2008. As well as investment fees of 1.5%, Barclays agreed to pay Qatar the 322 million pounds as part of two advisory agreements. The prosecutors at the Serious Fraud Office allege that those deals were fake and only designed to make the payments look legitimate.
In another phone call between Jenkins and Boath, the pair joked again about their bonuses potentially being cut as Jenkins watched the news on television. “Look at this: Bank bailout requires claw-back of many bonuses,” he said, reading out a headline.
“What happens if you’ve spent it?” Boath asked later in the conversation.
“I guess they’ll do a stomach pump,” Jenkins replied before laughing.
When questioned by Brown about the remarks, Jenkins said he was highly attuned to news about bonuses being cut because he was on a big pay packet and was trying to hire people who tended to focus on their compensation.
“This was a day, a period, a week in which there were discussions about wholesale redundancies in the financial services sector -- senior executives being let go, bonuses being cut,” Jenkins said. “I think sometimes we forget how dramatic that week was.”
The October capital raising was in focus during the cross-examination of Jenkins on Thursday. Referring to another phone call between Jenkins and Boath, where they discussed the Qatar deal, Brown said “it just rolled into the conversation and you didn’t seem to bat an eyelid that a fee we know for $39 million was going to be put into an advisory agreement.”
“We’ve seen how complex and how much anxiety was created by the first one and it’s like water off a duck’s back to you,” he said.
“The anxieties were sort of behind us,” Jenkins replied. “We’d been through the June, July hand wringing.”
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