Barclays boss turns down $4 million bonus
The chief executive of Britain's Barclays bank said Friday he is giving up his 2012 bonus amid a string of high-profile scandals over market-fixing, mis-selling of loan products, and other forms of financial malfeasance.
Antony Jenkins had been entitled to a maximum bonus of 2.75 million pounds ($4.35 million), or 250 per cent of his 1.1 million pound salary, and Sky News television reported Thursday that senior bank officials were canvassing investors about the possibility of awarding him a seven-figure sum.
In a statement released early Friday, Jenkins said he was waiving his bonus.
"I wish to make clear that I concluded early this week that I do not wish to be considered for a bonus award for 2012 and I have communicated that decision to the board," said Jenkins, who became CEO in August after previously leading Barclays' retail division.
In a nod to the "multiple issues of our own making besetting the bank," Jenkins said it was only "only right that I bear an appropriate degree of accountability for those matters."
Bankers' massive bonuses have been a hot button issue in Britain and elsewhere ever since the financial crisis touched off by the collapse of the U.S. housing market in 2007 damaged the global economy. Executives who drove their banks to the brink of ruin got eye watering payouts while taxpayers were left footing multibillion dollar bills for their botched bets.
Public anger in a year of scandals
Public anger over bonuses has been deepened by revelations of criminality at the highest levels of the financial industry. The past year has seen allegations that British banking giant HSBC helped launder hundreds of millions of dollars for Mexico's violent drug cartels; that Switzerland's UBS helped American clients hide more than $1.2 billion from tax officials; and that London-based Standard Chartered spent years helping Iranian, Sudanese, Libyan and Myanmar customers evade U.S. sanctions.
Although a host of international financial institutions have come under scrutiny as the world economy tries to find its feet, Barclays' reputation has taken a particularly heavy beating.
Barclays was one of several British banks involved in a scandal over Payment Protection Insurance, where consumers were signed up for inappropriate and expensive insurance products. That scandal has already cost Barclays hundreds of millions of pounds in compensation, and the investigators are looking into whether mis-selling may have occurred elsewhere. Earlier this week, Britain's Financial Services Authority announced a review into whether Barclays – along with other banks – had inappropriately foisted interest rate hedging products on small businesses.
There are also lingering questions about whether Barclays broke the rules when it took massive cash infusions from Qatar's sovereign wealth fund in 2008. Qatar's 6.1 billion pound investment helped Barclays avoid having to ask for a U.K. government bailout, but in July the bank acknowledged that regulators were checking whether Barclays had properly disclosed fees it had paid as part of the fundraising drive.
Far more dramatic was the revelation that senior executives Barclays were involved in a campaign to rig a key interest rate known as the LIBOR. The rate-fixing drive was intended to make Barclays appear healthier than it really was, but because the LIBOR sets benchmarks for hundreds of trillions of dollars of contracts globally, its effects would have been felt across the financial industry – including loans, pensions, and mortgages.
Barclays's role in fiddling the rate led to a $453 million fine and the resignation of a slew of executives, including Jenkins' predecessor as chief executive, Bob Diamond.