Pity poor Hector Sants. He may be on a rumoured £3m-a-year package as head of compliance at Barclays, but he could probably have done with a little extra all the same. Unfortunately, poor Hector has lost out.
The Times reports that Sants made himself a paper profit of only £52.50 after purchasing 60 Barclays shares in the bank’s rights issue this week. Hector can now treat himself to a new kettle or three quarters of a tank of petrol. By comparison, some of his senior banking colleagues are in a position to purchase second homes or third yachts. Skip McGee, the head of Barclays in the US, has made a notional profit of £358k on his purchase of shares in the rights issue. And Antony Jenkins, the grey-seeming chief executive of Barclays Group, has made himself an extra £500k+ through his show of support for the bank. Sants looks a bit silly. He must be kicking himself for being so restrained.
Separately, the New Yorker ran an interesting story yesterday which suggested people working in banking could have people working in strategy consulting to thank for some of their huge pay packages in the past.
Examining the demise of failed US law firm Dewey & LeBoeuf, the New Yorker said unsustainably huge pay packages offered to star legal ‘rainmakers’ were partly to blame. At one point, for example, a top lawyer at D&L received a sign-on bonus of $16m. Dewey & LeBoeuf’s crazed generosity was reportedly encouraged by strategy consulting firm McKinsey, which advised in 2007 that it ought to pay its senior staff more handsomely because they were bringing in all the money. Banks like RBS have also been known to consult McKinsey. Did RBS receive similar advice, we wonder?
Bonus clawbacks could contravene human rights. (Financial Times)
High speed trading is no longer it. (Financial News)
Once, banks achieved a 20% ROE. Now, Wells Fargo reached a 14% ROE in the first half, while JPMorgan and Goldman Sachs posted 13% and 12%, respectively. Citigroup, Morgan Stanley and Bank of America were all below 9%. (Bloomberg)
Maria Netley, RBS’ European head of client electronic execution, has also left the bank. (Financial News)
How Brazil’s richest man lost $35bn in one year. (BusinessWeek)
We are reaching end times for Western affluence. (NY Times)