Barclays Plc Chief Executive Officer Antony Jenkins said bankers must regain their moral footing and serve society’s long-term interests if the industry is to undo the damage caused by the financial crisis.
Bankers were too focused on the short-term, too self-serving and too aggressive in their actions in the years leading up to the global credit crunch, Jenkins said today at a debate hosted by London’s St. Paul’s Institute, a church group that seeks to engage banks with moral questions.
“The financial crisis exposed the destruction that can be caused if we have capitalism without a moral compass -– lacking the control which can make it a force for good,” Jenkins said in prepared remarks at the 17th-century St. Paul’s Cathedral. “And the behavior of banks, of course, was at the center of this lightning storm.”
Jenkins, 51, who took over as CEO in August, is seeking to revive profit at the lender and avoid repeating the regulatory missteps that led to the resignation of his predecessor, Robert Diamond. Jenkins said in February he will cut 3,700 jobs and target a return on equity, a measure of profitability, that exceeds the lender’s 11.5 percent cost of capital.
Barclays, the U.K.’s second-largest bank by assets, said 5.3 percent of shareholders opposed its executive-pay report at its annual general meeting in April as Chairman David Walker said the era of excessive compensation is behind the bank.
The lender had “overpaid” employees in the past and is “determined to be moderate in the outcomes we produce” on pay, Walker told investors in London at the time.
Jenkins received 2.3 million pounds ($3.6 million) in salary and long-term bonuses last year, compared with 6.3 million pounds Diamond got in 2011. Jenkins said in February he won’t take a bonus for 2012 after a series of regulatory missteps including a 290 million-pound fine last June for attempting to rig global interest rates.
The bank awarded 428 workers with more than 1 million pounds in 2012, down from 473 in 2011.
A review by Rothschild Inc. Vice Chairman Anthony Salz in April was critical of past compensation at the bank and for past failings in its culture. Barclays paid its top 70 executives “consistently and significantly above” the industry norm, according to Salz.
Jenkins said today that a lesson of the crisis was that a company cannot have long-term success without behaving responsibly.
“We need to weigh up what the decisions we take will mean for communities and societies,” Jenkins said. “Capitalism can be a force for good, and banks in particular occupy a unique position in society and in capitalism.”
-- Editors: Steven Crabill, Dan Reichl