The pay of Barclays’ chief executive has more than doubled to £10.5m, as a rebound in investment banking and steady interest rates helped push the UK bank’s annual profits up by almost a quarter.
CS Venkatakrishnan’s payout rose from £4.6m a year earlier in 2023 and is the highest package paid to a Barclays CEO in a single year since Bob Diamond’s controversial £17m pay package in 2011.
His pay jumped as a result of the vesting of long-term bonuses and a rise in the value of Barclays shares that make up those payouts, according to the bank’s annual report.
Shareholders will be asked to give the green light to a new pay policy at this year’s annual general meeting that will cut Venkatakrishnan’s salary but increase his potential bonus, giving him the chance to earn up to £14.3m a year.
Meanwhile, Barclays’ bankers have also cashed in. Top performers will share a bonus pool worth nearly £1.9bn, up from £1.7bn a year earlier. That incudes the £647m worth of bonuses shared between 832 so-called “material risk takers” within its investment bank, who in total earned £1.2bn between them.
One unidentified banker took home more than €17m (£14m), which is a third more than the chief executive’s pay packet, according to documents filed alongside the annual report.
Luke Hildyard, executive director of the High Pay Centre thinktank, said: “The £10m payout for the Barclays CEO and the £1.2bn spent on a few hundred investment bankers epitomise the inequality in the UK economy. Excess at the top contrasts with much wider hardship across a country plagued by stagnant growth and the aftermath of the cost of living crisis.”
Venkatakrishnan took over as chief executive in November 2021 after Jes Staley stepped down unexpectedly amid an investigation by the City regulator into whether he had properly disclosed his ties to the late financier and child sexual abuse offender Jeffrey Epstein.
Venkatakrishnan served as Barclays chief risk officer from 2016 to 2020, having joined from Wall Street bank JP Morgan, where he had worked since 1994 in senior roles in asset management and investment banking.
Barclays reported pre-tax profits of £8.1bn for 2024, up 24% from £6.6bn a year earlier. The strong performance was aided by a 7% jump in income from its investment bank, amid a rebound in dealmaking and market activity, as well as steady interest rates that supported income at its UK retail business.
The jump in profits came despite the bank putting aside its first-ever provision for the growing scandal around motor finance commissions, worth £90m.
Lenders have been grappling with the fallout of a court judgment in October that vastly expanded a Financial Conduct Authority investigation.
The ruling determined that paying a “secret” commission to car dealers who had arranged the loans without disclosing the sum and terms of that commission to borrowers was unlawful. It has ignited fears of a big compensation bill that could rival that after payment protection insurance scandal, and cost lenders a combined £50bn.
While Barclays pulled out of the motor finance market in late 2019, analysts at RBC Capital expect the bank could still face a compensation bill of up to £442m.
Banks are now hoping that efforts by the chancellor, Rachel Reeves, to intervene in the case and potentially sway the courts to offer lower payouts could cut their bills.
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Barclays, which is headquartered in London, is keeping a close eye on developments in the US, where Donald Trump has used executive orders to reverse diversity, equity and inclusion (DEI) policies in the federal government and is trying to apply them to the private sector.
While rival financial companies such as Deloitte and Goldman Sachs have started to roll back their own DEI policies in response, Venkatakrishnan – who was born in India – said Barclays had an “enduring commitment to a culture of inclusivity in the bank. It’s enduring and unwavering”.
“If you want to get the very best people, by necessity, you get a very diverse workforce,” he told journalists on Thursday. “We want to provide equality of opportunity, and we want to create that inclusive environment in which people really can shine, excel and contribute to this bank. So that’s our approach, and we will continue to run the business and run the company in that way”.
Barclays is also grappling with the fallout of a big technology outage this month, leading its digital services to be disrupted for around two days.
Venkatakrishnan apologised to customers affected by the incident. “I am deeply apologetic to all our customers for the inconvenience that was caused by that outage,” he said.
“We are absolutely focused on assisting customers who experienced general difficulty as a result of the outage, and we will strive to make sure that the people who were impacted will be compensated,” he said.
