Britain’s four biggest banks paid 32 senior executives a combined 103 million pounds ($161 million) last year amid political criticism of their bonuses.
Barclays Plc, which yesterday awarded Chief Executive Officer Robert Diamond 6.3 million pounds for 2011, paid its eight most senior executives that aren’t on the board a combined 37 million pounds, according to its annual report. The lender said it cut bonuses by 48 percent and froze salaries.
Prime Minister David Cameron in January urged banks to show “proper regard” in limiting bonuses and demonstrate how pay is related to performance as the government executes the tightest fiscal squeeze since World War II. Banks have tried to assuage public anger following the financial crisis by limiting cash bonuses and cutting salaries.
“People are sick of seeing money that should be spent supporting businesses being lavished on the very people that brought our economy to its knees a few years ago,” said Brendan Barber, the general secretary of the Trades Union Congress umbrella labor organization. “Ministers must do more to force banks to prioritize supporting the real economy over enriching their senior staff.”
Royal Bank of Scotland Group Plc (RBS) paid 19.8 million pounds to its top eight employees, with the amounts ranging from 4.7 million pounds to 978,000 pounds. Lloyds Banking Group Plc (LLOY) awarded 16.2 million pounds, with the highest-paid individual getting 1.2 million pounds. HSBC Holdings Plc divided 29.3 million pounds among its eight, company filings show. The banks aren’t required to disclose the identities of the employees.
Barclays said yesterday it cut Diamond’s compensation by almost a third and froze his salary for 2012 after the lender missed its profitability target. His 6.3 million pounds in salary, bonuses and stock compared with 9 million pounds in 2010.
Barclays said last month it may fail to hit the 13 percent target for return-on-equity by 2013 after it fell to what Diamond said was an “unacceptable” 6.6 percent in 2011.
“The board and the committee recognize that our return on equity has to improve,” Alison Carnwath, chairman of the board’s remuneration panel, said in the report. “In order to achieve this, our operating costs need to be reduced. Remuneration has its part to play in that.”
Diamond is Britain’s second-best paid bank CEO after HSBC’s (HSBA) Stuart Gulliver, who received 7.2 million pounds. Diamond is only Barclays’s third highest-paid executive after two unidentified bankers received 6.7 million pounds and 6.5 million pounds respectively. Officials at Barclays declined to identify the two individuals.
Pretax profit at Barclays Capital, the investment banking arm led by Rich Ricci and Jerry Del Missier, fell 32 percent to 2.97 billion pounds in 2011, the lender said last month. The bank reduced bonuses for the 24,000 employees at the securities unit by 30 percent to 64,000 pounds a person.
Diamond’s package includes a 2.7 million-pound stock bonus and a further 2.25 million pounds depending on how the bank performs in future years. He won’t receive a cash bonus.
Barclays also made a 5.75 million-pound so-called tax equalization payment on Diamond’s behalf to tax authorities after he relocated to the U.K. from the U.S., the company said. He also received 675,000 pounds in cash instead of a pension contribution and received benefits valued at 474,000 pounds including medical insurance, a company car and tax advice.
RBS CEO Stephen Hester’s salary was frozen at 1.2 million pounds, while he received a long-term stock award the lender expects to be valued at about 1.6 million pounds, the lender said in its annual report yesterday. Investment-banking chief John Hourican will receive about 4.2 million pounds when shares awarded in 2009 vest in April, RBS said.
Separately, Lloyds gave CEO Antonio Horta-Osorio shares valued at about 3.4 million pounds as part of his long-term incentive plan, the lender said in a statement. Lloyds gave nine executives a total of 3.89 million pounds of shares vesting over the next three years. Horta-Osorio and the nine executives, including consumer banking chief Alison Brittain and Chief Risk Officer Juan Colombas, will also share in 14.4 million pounds of shares vesting in 2015.
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