Barclays CEO Antony Jenkins made headlines on Tuesday for accepting his first bonus since taking charge of the bank in 2012.
This might sound reasonable. Barclays reported higher annual profits for 2014 and Jenkins has taken strategic steps toward shifting resources away from the investment bank to “more profitable” areas, as Bloomberg noted.
But here’s the thing: Barclays isn’t really doing that well.
The bank said profits rose to £5.5 billion in 2014, up from £4.9 billion the year prior. But, as Reuters’ Steve Slater and Matt Scuffham find, that number doesn’t include “charges, provisions and restructuring costs,” which together bring pretax profit down to £2.3 billion.
The New York Times tallied the bank’s “laundry list of legal disclosures” at £2.8 billion ($US4.3 billion) for the year.
Barclays has faced a number of legal scandals over the last few years: first, the Libor Scandal, for which various regulators fined the bank a combined $US450 million in June 2012; now, the currency manipulation scandal, in which US and British authorities allege that forex traders rigged currency benchmarks. The bank has already set aside £1.25 billion ($US1.9 billion) to settle that investigation.
The bank also missold insurance products to British customers and will spend £200 million ($US307 million) compensating them — and it could be involved in a new DOJ investigation into alleged precious metals market rigging.
In light of these incidents, and the hefty toll they have taken on the bank’s finances, Jenkins skipped his bonuses the past two years. But this year, he told a BBC radio programme, he felt it was deserved.
Meanwhile, the bank laid off about 7,300 people last year (by 2016, the investment banking division will be down 7,000 employees, the Times reported). And bonuses were actually cut for employees across the board. About £1.9 billion ($US2.9 billion) went to 273 people, down from £2.4 billion ($US3.7 billion) awarded to 363 people last year, Bloomberg reported.
Jenkin’s £1.1 million ($US1.7 million) bonus brought his total compensation up to £5.5 million ($US8.5 million) for the year. You go, Jenkins.