Barclays' results are out. Flags are being waved and corks popped over a 318% increase in profits at group level, and public indignation is being voiced over a 23% increase in group level bonuses.
Within Barclays' corporate and investment bank in particular, profits are up by less and bonuses for the average high performer are up by more. But some of those who will have expected to receive a bonus for 2021 have received no bonus at all.
Today's Pillar 3 report for Barclays reveals that nearly 10% of the 875 material risk-takers in the corporate and investment bank didn't actually get a bonus last year. This is slightly less than the nearly 12% who didn't get a bonus in 2020, but given the 46% increase in profits in the corporate and investment bank in 2021, it may still have come as a surprise to those affected.
Barclays defines material risk-takers as senior executives and "employees whose professional activities could have a material impact on the Group’s risk profile." They're usually managing directors and senior traders. As the chart below shows, pay for the average material risk-taker who received a bonus at Barclays last year was £1.4m ($1.9m) last year, up from £1.1m in 2020.
Higher bonuses meant Barclays paid 700 people over €1m last year, 143 more than in 2020. At the top end of the scale, three Barclays employees earned more than €10m.
Who are the high earners in Barclays' investment bank? The bank doesn't provide this level of disclosure, but last year many are likely to have been in M&A advisory and equity capital markets, where revenues rose by 64% and 72% respectively in 2021. By comparison, Barclays' fixed income traders may well have been disappointed: their revenues fell 33% last year on the back of what the bank described as, "tighter spreads and the non-recurrence of prior year client activity levels."
In most years, Barclays clears out senior staff before bonuses are paid. There has been little sign of that this year, but the clearing out may have happened behind the scenes. - Somehow, there were nearly 20% fewer material risk takes in the investment bank during 2021 than the year before.
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