Barclays has frozen £22 million of bonus share awards made to former boss Jes Staley amid an investigation into his relationship with disgraced financier and convicted sex offender Jeffrey Epstein.
The banking giant’s annual report revealed it has suspended Mr Staley’s unvested long-term bonus share awards pending the regulatory probe.
It said almost 70 per cent of the long-term incentive scheme share awards granted since he was appointed in 2015 remain unvested – totalling 11.2 million shares worth around £22 million at current market prices.
Mr Staley stepped down last November to contest findings by the Financial Conduct Authority and Prudential Regulation Authority over the way he represented his relationship with Epstein to the bank.
The findings of the investigation have not yet been made public.
He still receives his contractual entitlement to £2.4 million in cash and shares – the equivalent of 12 months in fixed pay – as well as a pension allowance and other undisclosed benefits.
The bank said: “In line with its normal procedures, the committee exercised its discretion to suspend the vesting of all of Mr Staley’s unvested awards, pending further developments in respect of the regulatory and legal proceedings related to the ongoing Financial Conduct Authority and Prudential Regulatory Authority investigation regarding Mr Staley.”
It came as Barclays revealed that pre-tax profits soared to £8.4 billion in 2021 after it released cash set aside for pandemic loan losses and notched up record investment banking earnings.
The lender more than doubled profits from £3.1 billion in 2020 thanks to the release of £653 million in bad debt provisions, compared with £4.8 billion set aside for Covid loan losses the previous year.
I am proud that we have delivered this resilient performance while continuing to support our clients and customers through another year of Covid-19 related challenges
CS Venkatakrishnan, chief executive
The better-than-expected results also showed that the group’s corporate and investment banking division recorded its highest-ever pre-tax profits of £5.8 billion over the year, up from £4 billion in 2020.
Its annual report showed Barclays increased its bonus pot for staff to £1.9 billion, up from £1.6 billion in 2020.
Barclays offered cheer for investors as well as it said it would buy back £1 billion of its own shares and increase its full-year dividend to 4p a share, helping the bank’s shares lift 3 per cent.
The group also announced its first female finance director, appointing deputy group finance director Anna Cross to the role from April 23.
She will succeed Tushar Morzaria, who is retiring after more than eight years in the post and becomes the first woman to hold one of the top three boardroom jobs at the bank.
The ex-CEO’s reward freeze will be a welcome token for those disheartened by the ongoing probe into his conduct
Sophie Lund-Yates, from Hargreaves Lansdown
The figures come after a difficult year for the bank, with new chief executive CS Venkatakrishnan thrown into the role last November after Mr Staley’s shock resignation.
Mr Venkatakrishnan, known as Venkat, said: “I am proud that we have delivered this resilient performance while continuing to support our clients and customers through another year of Covid-19 related challenges.”
He added: “We recognise that the economic environment is more than usually uncertain, with rising inflation rates and tighter monetary policy, while many parts of society continue to recover from the severe social and economic effects of the Covid-19 pandemic.”
The group added it had “limited” trading exposure to Russia as the crisis with Ukraine continues to mount, having exited the country many years ago.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “The ex-CEO’s reward freeze will be a welcome token for those disheartened by the ongoing probe into his conduct.
“However, shareholders are facing no such freeze, with a further £1 billion buyback announced, as the improved macro-economic outlook allowed for an enormous reversal in impairment charges.”
