Barclays said to be planning to cut investment bankers’ bonuses

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Activist investor Edward Bramson says Barclays could be forced to raise capital, sell lucrative units or cut dividends if it carries on prioritising its investment bank

San Francisco/London — Barclays plans to cut bonuses for investment bankers in a bid to improve performance and ward off activist investor Edward Bramson, the Financial Times reported.

Bonuses for the first quarter at the underperforming investment-bank division might decline by double digits from a year earlier, the newspaper reported, citing people it did not identify who were briefed on the plans. The payments will be more closely tied to performance as the London-based bank seeks to cut costs, the Financial Times said.

Barclays CEO Jes Staley, in charge since 2015, has pushed a strategy of expanding the firm’s investment-banking operations — a plan that has come under increased pressure since Bramson’s Sherborne Investors began buying up shares and agitating for change. The division that houses trading and investment banking has the lowest return on equity, a measure of profit, of any unit at the UK bank.

In a letter on April 8, Bramson said Barclays could be forced to raise capital, sell lucrative businesses or cut dividends if it persisted in prioritising its investment bank. The abrupt departure of Tim Throsby, who ran the investment bank until March month, put the division under the direct control of Staley.

 

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