Barclays will lift the bankers’ bonus cap, with staff able to receive up to 10 times their salaries in compensation, according to a report.
According to The Guardian, an internal memo sent to staff said that the bankers’ bonus cap would be removed, four months after it was approved at the bank’s Annual General Meeting (AGM).
The time taken to remove the cap is due to the maximum ratios offered to staff being finalised, with up to 10 times salary available.
The report stated that the memo explained that compensation would be decided at an “individual level” and would be “performance-based” and “market-informed”, and the change should alter employee expectations around compensation.
However, the change will give “additional flexibility” in how variable pay is used to acknowledge individual performance, Barclays said, and this would help to attract and retain talent.
The bankers’ bonus cap, which was introduced in 2014 after the financial crisis, limited bankers’ bonuses to double their salary.
The cap was then scrapped by former Chancellor Kwasi Kwarteng in 2022 as part of the mini Budget.
It was said at the time that the removal of the cap would boost London’s competitiveness as a financial centre and boost the economy.
In 2023, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) confirmed that the cap on bankers’ bonuses would be removed as part of efforts to “strengthen the effectiveness” of the UK’s remuneration regime, with the changes coming into force on 31 October.
Barclays follows the likes of Goldman Sachs, which removed the limit in May this year, and the report suggests that other major lenders are in the process of lifting the cap.
Prior to the election, the Labour Party said that it did not plan to reinstate the bankers’ bonus cap, with Chancellor Rachel Reeves saying that she wanted to be a “champion of a successful and thriving financial services industry in the UK”.
A Barclays spokesperson said: “The revised bonus cap will not alter the way Barclays sets its incentive pool, which is based on overall group performance. It will allow us greater flexibility to differentiate individual bonuses within a small and defined group of colleagues, enabling Barclays to continue to compete effectively to retain and attract the best talent globally.”
Anna is currently the deputy editor for Mortgage Solutions and editor for Specialist Lending Solutions. She has worked as a journalist since 2019, having secured her Gold Standard NCTJ diploma from News Associates in a fast-track six-month course.
She started her career as a report at specialist publication The Insurance Insider covering a wide range of areas before joining Mortgage Solutions and Specialist Lending Solutions in 2021.
In her role, she helps put together and structure the news agenda for the day and writes up press releases, reports, interviews, analyses and exclusives across both titles. She also commissions blogs for Specialist Lending Solutions and hosts online masterclasses and in-person events across the business.
She has been shortlisted for three journalism awards, which include BIBA Journalist and Media Awards Scoop of Year Award in 2020, Headline Money Mortgage Journalist of the Year Award (B2B) in 2022 and 2023.
Prior to being a journalist, Anna worked in ecommerce across Snow + Rock, Cycle Surgery and Runners Need websites, and before that worked at specialist financial PR firm Rostrum.
In her spare time, Anna enjoys reading, seeing live music, and cooking for friends and family. When she gets a chance, she also enjoys hiking, skiing and indoor rock climbing.
