As Barclays PLC (NYSE:BCS) (LON:BARC) agrees to settle record fines for rigging markets, and the firm’s litigation provisions increased 142% in 2013, it nonetheless found the courage to provide its 12 most senior executives $53 million (31.8 million pounds) in bonuses.
The American-born CEO of the UK bank, Hugh “Skip” McGee, received over $14.7 million as bank profits plummeted and the bank has plans to eliminate nearly 12,000 jobs. The bank pretax profit in the fourth quarter of 2013 was $316 million (191 million pounds) versus $2.3 billion (1.4 billion pounds) in 2012. McGee, a former Lehman Brothers executive, joined Barclays PLC (NYSE:BCS) (LON:BARC) in 2008 after Lehman Brothers Holdings Inc Plan Trust (OTCMKTS:LEHMQ) collapsed and Barclays bought certain US business units.
Barclays trimming headcount, unloading unprofitable business units
Barclays PLC (NYSE:BCS) (LON:BARC) is in a trimming mode, as the bank is planning on unloading unprofitable businesses and trimming staff, according to a Bloomberg report.
The cost cutting, however, did not appear to impact recent bonuses. Other notable bankers on the compensation list was investment bank co-head Eric Bommensath, pulling down a $14.2 million bonus (8.65 million pounds) in stock compensation. Bommensath was followed by his investment bank co-head, Tom King, who was awarded $6.32 million (3.81 million pounds) and the bank’s Finance Director Tushar Morzaria, pulled down was $1.79 million (1.08 million pounds) in stock, according to the report. Given its apparent girth given the situation, the 2014 bonus is still less than the $66.8 million (40.3 pounds) given to nine executives in 2013.
As reported in ValueWalk, previous bank chieftain Anthony Jenkins had refused his bonus in 2013 due to regulatory issues and litigation expenses.
Market manipulation investigation
Barclays PLC (NYSE:BCS) (LON:BARC) is part of a group of large banks being investigating with manipulating global currency markets, as reported last month in ValueWalk. At that time we reported investigations into charges that senior dealers at large banks colluded to rig currency markets are now “well-advanced” in “several jurisdictions” including the United States and Switzerland, the report noted. According to Martin Wheatley, head of Britain’s financial regulator FCA, charges could be “every bit as bad” as the Libor interest rate-fixing scandal which cost banks $6 billion in fines. The FCA investigation is expected to run parallel with a criminal investigation and could run into 2015. In this case, chat room participants used names such as “The Cartel” and “The Bandits Club” to orchestrate their market trades.