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Barclays is proposing to overhaul the way it pays its chief executive, CS Venkatakrishnan, in a move that would cut his fixed salary but give him £9m if the lender hits its profitability targets.
The British bank wrote to investors this week outlining its plans to change the way it pays. Venkatakrishnan and the group’s chief financial officer, Anna Cross, according to a person familiar with the matter.
The changes, if approved, would reduce Venkatakrishnan’s fixed salary from £2.95 million to £1.59 million, but the former JPMorgan executive would be eligible for bonuses and long-term stock options worth up to eight times his new salary, the person said.
They added that Venkatakrishnan, known as Venkat, would receive around £9 million if Barclays achieved its previously stated goal of a return on tangible equity (a crucial measure of bank profitability) of 12 percent by 2026.
His maximum earnings would be capped at just over £14 million, but he would only be awarded this amount if Barclays achieved a return on tangible equity of more than 14 per cent, the person said.
Venkatakrishnan’s total remuneration amounted to £4.64 million for 2023, up from £5.2 million the previous year.
The move, which was first reported by Sky News, comes after Barclays last year became the first British lender to scrap bankers’ bonus cap imposed by the EU, following the UK’s decision in 2023 to scrap the caps in a post-Brexit boost for the City of London.
At the time, Barclays told its staff it would establish bonuses for its highest-ranking employees, the so-called material risk takers, up to 10 times their fixed salary, keeping the base salary the same.
Under the bonus cap, which was introduced across the EU in 2014 in the wake of the global financial crisis, bonuses were limited to twice the base salary.
Venkatakrishnan has been a rare vocal supporter from chancellor Rachel Reeves, who frustrated many business leaders by raising taxes by £40 billion in the October budget and has so far struggled to revive Britain’s ailing economy.
Speaking at the World Economic Forum in Davos on Tuesday, Venkatakrishnan said there were “many reasons to be optimistic about the UK”, including its financial sector. Reeves also attended the forum in a bid to attract business leaders and foreign investors.
Barclays said its remuneration committee “meets with stakeholders throughout the year to seek feedback on our remuneration policy”.
“Whether or not the committee decides to propose any changes to our current director remuneration policy in 2025, the policy will continue to focus on rewarding sustainable performance and close alignment with shareholder interests.
“The committee will publish its views and decisions in the 2024 annual report on February 13.”