But it's not all bad news for Venkatakrishnan
Barclays CEO CS Venkatakrishnan has only been in the job since November 2021, but the mortgage lender is already looking to reduce his fixed salary. The significant revamp of its chief executive’s pay structure will reduce his base salary substantially, but, in better news, will offer him up to £9 million if the bank meets its profitability goals.
The UK-based lender recently informed investors about its proposal to adjust the compensation packages for Venkatakrishnan and group finance director Anna Cross, according to the Financial Times.
Under the proposed changes, the ex-JP Morgan bankers’ fixed salary would be slashed from £2.95 million to £1.59 million. However, he would become eligible for bonuses and long-term stock awards worth up to eight times his base pay, potentially resulting in a £9 million payout if Barclays hits its return on tangible equity (RoTE) target of 12% by 2026.
FT reports that Venkatakrishnan’s total pay would be capped at just over £14 million, but achieving this maximum would require Barclays to deliver a RoTE exceeding 14%.
For 2023, Venkatakrishnan earned a total of £4.64 million, a decline from £5.2 million in 2022.
Read more: Is Barclays going to buy Santander?
The plans, first reported by Sky News, come in the wake of Barclays becoming the first UK bank to abolish the EU-imposed bonus cap following Britain’s 2023 decision to scrap the rule post-Brexit. The cap, introduced in 2014, limited bonuses to twice an employee’s fixed salary. Barclays has since allowed senior executives, categorized as "material risk takers," to earn bonuses worth up to 10 times their fixed pay while maintaining their base salaries.
Venkatakrishnan, known as Venkat, has been one of the few business leaders to publicly support Chancellor Rachel Reeves, whose tax increases totalling £40 billion in October's budget sparked frustration among many corporate executives. Reeves, who has been working to attract investment and bolster Britain’s economy, also attended the World Economic Forum in Davos this week.
Read more: Barclays slammed by crucial court case loss – shares plummet
Speaking at the same event, Venkatakrishnan struck an optimistic tone, stating, “There’s a lot to be optimistic about in the UK,” citing the strength of the country’s financial services sector.
Barclays, in a statement, said its remuneration committee regularly engages with stakeholders to gather input on its pay policies.
“Whether or not the committee chooses to propose any change to our current directors’ remuneration policy in 2025, the policy will continue to focus on rewarding sustainable performance and close alignment with shareholders’ interests," the bank said.
The remuneration committee is expected to publish its conclusions in the 2024 annual report, due for release on February 13.
