Barclays Weighs Boosting Bonus Pool for Traders by About 10%

(Bloomberg) -- Barclays Plc is likely to boost its bonus pool for traders this year by about 10% as it tries to balance a record performance with the uncertain long-term effects of Covid-19.

The British bank has begun virtual discussions with traders to temper expectations about raises, according to people with knowledge of the matter. A final decision hasn’t been taken and the bank could change its plans depending on fourth-quarter numbers, said the people, who asked not to be named discussing private information.

A spokesperson at Barclays declined to comment. The proposed rise would lag behind the 52% surge in trading revenue at the corporate and investment bank in the first nine months of the year, which reached 6.3 billion pounds ($8.5 billion) and helped offset falls elsewhere in the firm.

In the first half of the year, the group’s bonus pot was about 4% higher than a year ago, with pay growing more slowly than revenue. A boost of 10% would roughly keep pace with bonus growth during 2019. The lender doesn’t disclose how much of the total goes to the corporate and investment bank, its largest revenue source.

Bonus Dilemma

Chief Executive Officer Jes Staley has said the bank wants to compensate “fairly” but remains mindful of the uncertain economic outlook. Lenders must weigh rewards against the strains of a pandemic that’s dragged on other units, the possibility that the trading windfall won’t last and the optics of handing out bonuses in a downturn.

The Bank of England said last week banks should exercise a high degree of caution and prudence on cash bonuses for senior staff, as it began to unwind its effective ban on dividends imposed at the start of the pandemic.

Staley recently promoted C.S. Venkatakrishnan, previously chief risk officer, to be the bank’s global head of markets. The appointment came at a time of increased cost-cutting across the group.

Barclays is also keeping an eye on likely payouts by rivals, the people said. JPMorgan Chase & Co. may increase variable compensation for traders by 15% to 20% while Bank of America Corp.’s leaders are considering keeping their bonus pool flat, Bloomberg News reported. In Europe, Deutsche Bank AG CEO Christian Sewing has signaled plans to reward traders after a surge in fixed-income trading revenue.

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