Barclays under pressure from shareholders to give up bonuses

Barclays is under increasing pressure from its shareholders to claw back bonuses from those bankers responsible for the "elephant deal" scandal that resulted in the bank being fined £72m last week, as well as causing the bank to have its reputation tarnished again. Most of the senior people in the wealth division where the failings took place have left, however, and it is understood that some of them are owed deferred bonuses as they come due. Barclays has said that the "bank considers individual accountability and ensures that remuneration is reduced where appropriate... it is not possible or appropriate to comment on individual cases".

Barclays (LON:BARC) shareholders are urging the lender to claw back bonuses from bankers responsible for the “elephant deal” scandal, which led to it being fined £72 million.



The Financial Conduct Authority sanctioned Barclays last week for failing to check out a £1.88 billion deal that it handled for “politically exposed people” — powerful clients who might be in a position to take bribes that needed laundering. The transaction was known internally as an “elephant deal” because of the profit that it would yield to Barclays — £52 million.

One private shareholder in Barclays said that there was no excuse for the bank not to act in trying to penalise the people responsible for the misconduct. Even though the offences took place in 2011 and 2012, the deferral of bonuses for up to three years probably meant that senior people responsible were still due some of the bonuses that would have been improved by the deal next year. Barclays should stop these being paid out “at the very least,” according to investors.

“Barclays must be transparent about this,” one large institutional investor told The Times over the weekend. “They must say what the numbers are and how much has been or is being clawed back. This will definitely have to come up in conversations.”

Separately, newly-appointed chief executive Jes Staley is facing the Bank of England stress test on the day he takes the helm at Barclays. The group is expected to ‘pass’ the regulator’s financial healthcheck tomorrow, but a tougher test in 2016 could cause Staley to consider cutting the dividend. The former JPMorgan executive may also take radical action to revive the bank’s fortunes, such as spinning off its investment bank and relocating it to New York, analysts and investors say.

“Clarity on strategy is needed, with perhaps only a break-up able to crystallise value,” Berenberg analyst James Chappell said as quoted by Reuters. “Our preference remains for a full separation of the investment bank with a listing in the U.S.,” he added.

Barclays’ share price opened in negative territory this morning. As of 08:05 GMT, the blue-chip bank was trading 0.62 percent lower at 222.90p, underperforming the FTSE 100, which meanwhile stood 0.32 percent down at 6,349.98 points.

As of 08:36 GMT, Monday, 30 November, Wm. Morrison Supermarkets plc share price is 153.80p.