Barclays hands Staley near-£1m bonus as watchdogs' verdict looms

Barclays (LSE: BARC.L - news) is to hand its boss an annual bonus worth just under £1m for last year, even as he faces seeing a larger payout for 2016 slashed once regulators conclude a probe into his treatment of a whistleblower.

Sky News has learnt that Barclays' remuneration committee has decided to award Jes Staley, its chief executive, less than half his maximum potential annual bonus, equating to a payment of roughly £900,000.

People close to Barclays cautioned that final decisions on variable pay would not be taken until a board meeting next week.

Assuming it is ratified by directors, however, the bonus award will be disclosed in the bank's remuneration report, which will be published alongside its full-year results next Thursday.

Under the terms of his contract, Mr Staley is eligible for an annual bonus worth up to £1.88m - or 80% of his £2.35m total fixed pay.

A payout of approximately £900,000 would be more than 25% lower than Mr Staley's 2016 bonus award of £1.318m.

However, the Barclays chief faces being stripped of at least part of the previous year's award when the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) complete an inquiry into his efforts to unmask a whistleblower who made allegations about a colleague.

The two watchdogs have been investigating the matter since last April, and are expected to inform Barclays of their findings in the coming weeks.

The bank has already said that in addition to "a formal written reprimand", it would make "a very significant adjustment to Mr Staley's variable compensation award".

"The board will give consideration to the findings of the FCA and PRA investigations and the precise amount of the compensation adjustment will be determined by the Board once those investigations have concluded," Barclays said last year.

Insiders confirmed that because the whistleblowing incident took place in 2016, it was that year's bonus which would be subject to clawback and - in relation to the elements which have yet to be paid - cancellation.

A source said it was possible that Mr Staley would not be allowed to retain any of the £1.3m bonus, while the consequences for the American could yet extend beyond a financial penalty, depending upon the regulators' findings.

One shareholder said Mr Staley's award for 2017 sounded "reasonable" in the context of a further year of restructuring at Barclays which saw it shed its controlling stake in its African business, and continue the reshaping of its perennially frustrating investment bank.

Barclays' total incentive pay pool for 2017 is also expected to be lower than the 2016 figure of £1.533bn, reflecting directors' determination to avoid a return to the annual pay rows which plagued Barclays after the financial crisis.

One of Mr Staley's first actions after taking over from Antony Jenkins in 2015 was to announce that he would slash Barclays' dividend in half for 2016, and maintain it at that reduced level the following year.

Bonuses at Barclays have been slashed by more than 60% since 2010, a year in which it paid almost £3.5bn to staff.

Mr Staley's overall remuneration package for 2017 was unclear on Thursday, although the elements of his long-term incentive plan relating to shareholder returns are unlikely to pay out, given the 17% decline in its share price during the last year.

Like other bank chief executives, Mr Staley's pay deal now includes a salary, role-based pay allowance, annual bonus, long-term incentive award, pension contribution and other benefits.

Last year, he was paid nearly £4.3m.

The moves to curtail pay at Barclays, overseen by Crawford Gillies, who chairs its remuneration committee, are expected to be sufficient to avoid any major conflict with shareholders.

A reminder of Barclays' struggle to distance itself from a troubled last decade appeared this week when the Serious Fraud Office (SFO) charged its main operating subsidiary over the bank's emergency fundraising during the financial crisis.

The SFO had already charged Barclays' main holding company and four former executives on the basis that money had been loaned to Qatari investors in order to acquire the bank's shares - an unlawful action known as financial assistance.

Barclays is also continuing to try to resolve a multibillion dollar penalty from US authorities over the mis-selling of residential mortgage-backed securities.

More generally, banking sources believe that the 2018 results season will be the quietest since the 2008 crisis, with state-backed Royal Bank of Scotland (LSE: RBS.L - news) expected to marginally trim the £343m in bonuses it awarded last year.

Insiders said that Lloyds Banking Group, which was returned to full private ownership last year, would award a bonus pool of about £415m, an increase of about 5% on 2016.

Antonio Horta-Osorio, Lloyds' chief executive, is expected to benefit from a broadly proportionate rise in his annual bonus, but his overall pay is likely to be flat because of its static share price performance during the last 12 months, insiders said.

Barclays and Lloyds both declined to comment.