UK banks’ bonus pools have shrunk five per cent over the last year, but bosses’ handouts are on the rise
Bonus pools at the UK's big five banks have shrunk five per cent in the last year, but handouts to bosses have almost doubled in the same space of time.
The total bonus pool for HSBC, Lloyds Banking Group, RBS, Standard Chartered and Barclays fell to around £5.6bn for 2016, compared with around £5.9bn in 2015, when calculated on a constant currency basis for those lenders which report in US dollars.
However, bonuses for the men at the helm of the quintet leapt up during the same period, going from £2.4m to £4.7m, an increase of 95 per cent. The 2015 figure includes a bonus of £505,000 paid to Antony Jenkins, who left his role as chief executive of Barclays in July 2015.
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HSBC, which shocked the market last Tuesday when it revealed a 62 per cent drop in pre-tax profits, cut its bonus pool by 12 per cent to slightly over $3bn (£2.4bn), down from $3.5bn in 2015. However, chief executive Stuart Gulliver saw his bonus increase from £1.1m to £1.7m.
On the other hand, Lloyds increased its bonus pool by 11 per cent from £354m to £393m, as the lender reported its profits had more than doubled, thanks to lower payment protection insurance charges. Antonio Horta-Osorio also had his bonus increased from £850,000 to £1.2m.
Lifted profits didn't translate into a boosted bonus pool at every bank. Barclays, which almost tripled its pre-tax profits, revealed it was cutting one per cent from its bonus pool for the year, lowering it to £1.5bn. Chief executive Jes Staley, who joined the bank in December 2015 and received no bonus for that year, was awarded £1.3m.
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Meanwhile, Standard Chartered, which swung back into profit in 2016, boosted its bonus pool by five per cent, taking it from $993m to just over $1bn. Boss Bill Winters, who took up his role in 2015, was awarded a £497,000 bonus, having taken nothing the year before.
RBS, which reported its ninth annual loss in a row last week, revealed it was cutting its bonus eight per cent from £373m to £343m. Chief executive Ross McEwan did not take a bonus in either 2015 or 2016.
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It's not just UK banks feeling the pinch when it comes to tallying up their bonus pools. In an interview with German newspaper Frankfurter Allgemeine Sonntagszeitung, Deutsche Bank's administrative chief Karl von Rohr revealed the bank's bonus pool this year had been cut "by almost 80 per cent".
The German lender announced last month it would be scrapping the individual bonus proportion of its annual handouts for around a quarter of its staff. Although these workers will still be eligible for a payout from its group pool, it is understood the individual element of the bonuses has historically made up the bulk of the awards.