Investment bankers at Barclays have been grumbling about their lack of compensation for well over a year. It likely came as a frustration then to see their boss, investment banking head Rich Ricci, celebrating a massive financial windfall this week along with other top executives.
Ricci cashed in 5.7 million shares worth more than $26.6 million, the bank announced on Wednesday. The awards are not new; they are deferred shares related to performance bonuses awarded from 2009 to 2011, after the financial crisis hit. Chief executive Antony Jenkins, who’s newer to Barclays, received 1.8 million shares valued at roughly $8.5 million. He sold roughly half the stock to pay the tax liability.
In total, nine top Barclays executives were paid around $61 million in bonuses, despite the fact that the bank is cutting staff – particularly in the investment banking division – and clawing back hundreds of millions of dollars in bonuses from bankers with ties to the Libor rate-fixing scandal. Barclays has also recently overhauled its pay practices, but the rules don’t affect the vesting of previously awarded bonuses.
The news is likely a sore spot for Barclays’ U.S. investment bankers, who helped carry other regions with strong revenue numbers in 2012 but who felt they were disrespected come bonus time. When asked for comment regarding Ricci’s pay package, one U.S. banker responded via text with a derisive message that’s not printable.
Barclays fired roughly 5% of its poorer-performing U.S. investment bankers days before bonuses were announced, then later announced plans to cut 3,700 jobs globally, with roughly half of the cuts affecting the firm’s corporate and investment banking divisions.
Credit Suisse “obliterated” its New York rates trading team on Monday, letting go roughly a dozen traders and salespeople. Head trader Jim O'Brien was included in the cuts.
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Chief executive Jamie Dimon and the rest of J.P. Morgan’s current and former management team didn’t come off very well during last week’s Senate hearing into the “London Whale” trading debacle. It comes as no surprise then that the bank’s confidential government management rating was downgraded last year due to concerns over the company's executive team and its board.
Former Goldman Sachs partner Hugues Lepic is launching a private equity firm, Aleph Capital Partners, which manages private investments and capital solutions in Western Europe. Lepic is said to be partnering with U.S. buyout group Crestview Partners and its chief executive, Barry Volpert, another former Goldman partner.
The U.S. Securities and Exchange Commission is using its newfound oversight over some private equity firms and hedge funds to probe whether independent investment firms are overcharging clients for fees related to travel and entertainment expenses. The SEC asked one hedge fund for receipts for shuffling clients to meetings using private planes.
J.P. Morgan has agreed to dole out more than $500 million to settle with trustees representing M.F. Global customers who saw their money vanish in 2011 after the firm declared bankruptcy. J.P. Morgan was the chief custodian of M.F. Global assets, lent to the firm and cleared its trades.
Russian-speaking American Nick Jordan is leaving UBS to co-head Goldman Sachs’ Moscow operations. Goldman is hiring in Russia after being chosen by the government to help it attract more institutional investors.
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