Barclays considers overhaul of bonus infrastructure, FT reveals

25 January 2011

The infrastructure surrounding bonus payments at Barclays bank is to be changed as part of an overhaul of processes by the bank’s chief executive officer (CEO) Bob Diamond.

Future bonus payments for Barclays staff at managing director level or above may be made in contingent convertible bonds, the Financial Times (FT) reported, citing unnamed people familiar with the matter as sources.

Changes to the bonus payment infrastructure are to come as part of a wider review of the Barclays business.

Better performance, cost-cutting and setting new improvement targets as well as changes to pay are thought to be key issues of Mr Diamond’s review, which has yet to be approved by the Financial Services Authority, the newspaper explained.

News of the bonus pay overhaul follows the Barclays CEO’s recent questioning by a Parliamentary select committee over pay at his firm.

When questioned Mr Diamond said that although he was aware of the negative perception of the bonus culture within the banking sector, especially when austerity measures are being introduced to the public purse, the institution needed to ensure pay remained competitive.

He said he himself had not yet been offered a bonus payment by Barclays and would only decided whether to accept it after consulting with his family.

By Jim Ottewill

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