The European Union is not OK with role-based pay.
There’s been a lot of sabre rattling about the issue in the past few weeks, with the European Banking Authority (EBA) threatening to outlaw role-based payments (which have been introduced to avoid the EU’s bonus cap) unless they adhere to some strict criteria that prevents them from becoming mere bonus substitutes.
If role-based pay is outlawed, executives at Barclays might be a bit upset. Their role-based payments are frankly enormous.
Barclays posted an announcement to its investor site yesterday revealing just how enormous. For the second quarter alone (ie, only three months), Barclays gave:
- Head of the investment bank Tom King £600k of shares.
- Chief risk officer Robert Le Blanc £300k of shares.
- CEO Antony Jenkins £237k of shares.
- Finance director Trushar Morzaria £187k of shares.
- CEO of retail and business banking Ashok Vaswani £175k of shares.
- General counsel Bob Hoyt £150k of shares.
- CEO of Barclaycard Valerie Serrano Keating £150k of shares.
- Chief operations and technology officer Michael Harte £130k of shares.
- Head of internal audit Michael Roemer £112k of shares.
- Human resources director Irene McDermott Brown £50k of shares.
These shares vest over five years at a rate of 20% per year.
There are a few other things to notice here. Firstly, Tom King’s role-based payment, which will work out at an annualized rate of £2.4m if repeated, is huge. From this we deduce that role-based payments are a big thing for senior staff in the investment bank.
Secondly, chief risk officer Robert Le Blanc is receiving the second largest role-based payment. This seems strange. Is role-based pay taking over from bonuses in risk?
Thirdly, Barclays only has two women among the 10 executives listed. One, head of HR Irene McDermott Brown, is paid far, far less than anyone else.