Barclays is sounding out leading shareholders about a seven-figure bonus for its new chief executive despite the bank being forced to allocate almost £2bn last year to cover a series of mis-selling and rate-rigging scandals.
I have learnt that Antony Jenkins, who took over as Barclays' boss five months ago, is being lined up for a payout worth well over £1m, which would be deferred and paid in shares.
Mr Jenkins' bonus would form part of a total pot likely to be worth somewhere between £1.5bn and £2bn, according to people close to the bank. Directors who sit on the Barclays remuneration committee are proposing to cut the aggregate sum it pays out in employee bonuses from roughly £2.2bn last year, they said.
Leading investors in the bank are understood to have been briefed about the outline of Barclays’ plans at a meeting in recent days.
Shareholders' reaction is said to have been cautiously optimistic that Barclays is heeding their anger over pay following a string of rows which culminated in a huge protest vote at last year's annual meeting.
The remuneration committee is in the advanced stages of deliberations about the size and structure of its bonus awards for last year, and people close to the bank said that the reduced bonus pot also bore the fingerprints of both Sir David Walker, Barclays' new chairman, and Mr Jenkins.
According to people familiar with last week's meeting, Sir John Sunderland, the non-executive director who chairs Barclays’ remuneration committee, told major shareholders that the bank would like to pay Antony Jenkins, who took over as chief executive in August, a "significant" bonus for his work in 2012.
A precise figure was not disclosed by Sir John because the proposals are not yet finalised, and are still subject to modification when the Barclays board meets ahead of its annual results on February 12.
However, people close to the bank said that Mr Jenkins would be awarded a bonus of "north of £1m". It was unclear, they said, whether he would accept any award.
"The numbers will be contentious but they are undoubtedly heading in the right direction. There has been a clear signal that this is not the end-point [for cuts in bonuses]," said a person briefed on the talks between Barclays and its shareholders.
The new chief executive's entitlement is complicated by the fact that he became chief executive midway through the year, following the resignation of Bob Diamond in June.
According to a statement announcing his appointment in August, Mr Jenkins - who previously ran Barclays' retail and business banking operations - is now paid a base salary of £1.1m, with a potential annual bonus of £2.75m.
"For 2012, any incentive award made to Mr Jenkins will reflect his performance as group chief executive following appointment and his performance as Chief Executive of Retail and Business Banking prior to appointment."
Mr Jenkins' pay arrangements prior to his appointment as the group's chief executive were not identified by the bank because he did not sit on its main board.
When Barclays announced its Libor-rigging settlement with authorities in the UK and US last June, it announced that Bob Diamond and three senior colleagues - not including Mr Jenkins - would waive their entitlement to annual bonuses because of the scandal.
In addition to the £290m Libor fine, Barclays also set aside well over £1bn during 2012 to compensate customers who were mis-sold payment protection insurance, as well as £450m for the mis-selling of interest rate swaps to business customers. Further such provisions are likely.
Investors will be watching for details of the relative distributions of bonuses and dividends, which last year saw Barclays’ employees rewarded with a payout three times larger than the dividend pot.
That imbalance will be partly redressed this year, although Sir John signalled during last week's meeting that it would have further to go next year.
Last week, Mr Jenkins told Barclays' 140,000 staff that those who did not adhere to an ethical way of doing business would not be welcome at the bank.
Barclays declined to comment.