Barclays could cut in half the pension payments made to its chief executive, Jes Staley, after investor pressure to bring them in line with the rest of the bank’s workforce.
Staley received an annual cash payment of £396,000 last year in place of a pension in order to avoid taxes on pensions for higher earners. That could fall by as much as £200,000 under plans reportedly being shared with shareholders before a new remuneration policy due in February.
Staley’s pension payments were equivalent to 17% of his total fixed salary in 2018, and under the proposals would fall to around the same level as the 10% paid to other Barclays staff. A Barclays source said pension contributions across the business would rise from 10% to 12.5% of salary.
The changes, first reported by the Financial Times, would bring Barclays in line with the other major British banks, which have also faced pressure to stop outsized pension perks in the wake of an updated corporate governance code that said bosses’ pension contributions should be in line with the rest of the workforce.
Luke Hildyard, who campaigns on executive pay at the High Pay Centre, said the proposed changes were “obviously a positive example of engaged shareholder stewardship” as well as pressure from unions.
“Bringing executive pensions more in line with the wider workforce will be good for employee engagement and will help to rebuild the reputation of the banking industry,” he said. “At the same time, the banks still spend vast sums of money on a small number of top earners, with wider consequences for shareholders, the pay of lower earning staff and divisions between those at the top and everybody else across society as a whole.”
Lloyds Bank is planning similar changes to the pension payments to its chief executive, António Horta-Osório. Standard Chartered boss Bill Winters – who labelled an investor rebellion against his pay “immature and unhelpful” – will also receive half the previous £474,000 allowance.
In 2018 Barclays paid Staley £3.36m in total, 96 times more than the median Barclays employee. That included fixed pay of £2.35m in cash and shares, and he was also awarded a bonus of £1.06m, just under half the maximum possible.
On top of that he was given taxable benefits worth £55,000 – alone nearly double the UK’s median salary of about £29,600. Barclays’ annual report listed those benefits as private medical cover, life and ill health income protection, tax advice, money for relocation and money for a car allowance.
Staley can also avail himself of a chauffeur-driven company car for business trips, as well as other unnamed benefits that “are considered minor in nature”.
In 2018 Staley was required to hand over more than £1.1m out of his own pocket as punishment for attempting to unmask a whistleblower. He was fined a total of £642,430 by the Financial Conduct Authority and the Prudential Regulation Authority, and Barclays clawed back £500,000 of his bonus over the matter.