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That’s right! I don’t want to write about Barclays (LSE:BARC)! You probably think that means that Mr. Chambers is making me do it. That is simply not the case. I don’t want to write about Barclays because everyone else is writing about Barclays today. I don’t want to write about Barclays because they are a banking institution and I don’t like the way that banks have been treating their customers (I may have mentioned that in the past), their employees, and their shareholders. But I cannot ignore the first of the major banks’ annual results, so let’s get started.
Barclays’ share price has dropped over 4% today to 262.45 on news that . . . well, to be honest, I’m not sure which news has undermined investor confidence (again).
It could be the 4% decline in adjusted income from £29.361 billion to £28.155 billion.
It might be the 32% drop in adjusted pre-tax profit from £7.6 billion to £5.17 billion.
Or it could be the announcement that Barclays restructuring plan includes cutting up to 12,000 jobs this years, 7,000 of which will be in the UK!
It might even be that the 2013 shareholder dividend payout is £859 million whilst the staff bonus pool is £2.38 billion!
Roger Barker, Director of Corporate Governance at the Institute of Directors, asked the question that is on everyone’s mind: “For whom is this institution being run?“
Despite Antony Jenkins, Barclays’ CEO, waiving his bonus for the year, I seriously doubt that we are going to find him standing in line at a soup kitchen in the near future. My guess is that he will be able to get by on his meager salary.
In my humble opinion, the rub here is that there are any executive bonuses at all as long as the bank is generating less than favorable results. These bonuses are supposed to be performance-based. Here are my questions:
- What are the corporate, division, departmental and personal performance metrics that must be met in order to receive a bonus?
- How does the amount of the bonuses relate to those metrics on an individual basis?
I think that those are reasonable questions that demand reasonable answers. Instead, Mr. Jenkins reported that “After careful consideration, we determined that an increase of £210m over the prior year in the incentive pool was required in 2013 in order to build our franchise in the long-term interests of shareholders.”
So, let me get this straight, Antony. Your idea of a bonus is incentivise performance in advance? I thought that was what a paycheck was for. Are you telling me that you can’t get the performance out of your people without promising them ridiculously extravagant bonuses for doing the work they were hired to do? Do you realize that nobody believes you?
Now, do you see why I don’t want to write about Barclays? The only thing I want to write about Barclays is to revise the slogan on the back of their little chariots, from what you see above this article to “Say goodbye to better banking.” I believe in truth in advertising.
Guy in SFPE, Past-President of SFPE, Chairman of NFPA Building Code Panel, Nationwide Construction Safety Team
Advisory Committee, Chair NFPA Highrise Building Safety Advisory Committee.
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