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Barclays boss waives bonus as bank rocked by new Qatar allegations Barclays boss waives bonus as bank rocked by new Qatar allegations
(about 2 hours later)
Antony Jenkins, the chief executive of Barclays, will waive his 2012 bonus as the bank took another reputational hit after it emerged the bank is under investigation over its relationship with Qatar at the height of the financial crisis. Antony Jenkins, the chief executive of Barclays, is to waive his 2012 bonus as the bank took another reputational hit when it emerged it is under investigation over its relationship with Qatar at the height of the financial crisis.
The Qataris were key contributors to a crucial £7.3bn lifeline to Barclays following the credit crunch which allowed the bank to avoid a taxpayer bailout.The Qataris were key contributors to a crucial £7.3bn lifeline to Barclays following the credit crunch which allowed the bank to avoid a taxpayer bailout.
The Serious Fraud Office and the Financial Services Authority are looking at whether Barclays lent Qatar funds to invest in the bank, The Financial Times reported. The Serious Fraud Office and the Financial Services Authority are looking at whether Barclays lent Qatar funds to invest in the bank, the Financial Times reported.
Jenkins' decision to waive his bonus was announced shortly after the story appeared and ahead of his appearance before MPs and peers next week on the banking standards commission. The head of the bank's remuneration committee, Sir John Sunderland, appeared before the commission on Wednesday when he faced scrutiny about his plans to offer Jenkins a "seven figure" bonus for 2012. Jenkins's decision to waive his bonus was announced shortly after the story appeared and before his appearance next week before MPs and peers on the banking standards commission. The head of the bank's remuneration committee, Sir John Sunderland, appeared before the commission on Wednesday, when he faced scrutiny about his plans to offer Jenkins a "seven figure" bonus for 2012.
Jenkins was promoted to chief executive at the end of August after Bob Diamond quit in the wake of the bank's £290m fine for rigging Libor.Jenkins was promoted to chief executive at the end of August after Bob Diamond quit in the wake of the bank's £290m fine for rigging Libor.
Barclays would not comment on the latest twist in the investigation into the fundraising and neither would the SFO or the FSA. In July the bank had admitted that its finance director, Chris Lucas, and former directors were under investigation by the FSA about the 2008 fundraising and disclosures that were made about fees "under certain commercial agreements" in June and November that year. By August, the SFO had launched an investigation in to the payments. Barclays would not comment on the latest twist in the investigation into the fundraising and neither would the SFO or the FSA. In July the bank admitted that its finance director, Chris Lucas, and former directors were under investigation by the FSA about the 2008 fundraising and disclosures that were made about fees "under certain commercial agreements" in June and November that year. By August, the SFO had launched an investigation in to the payments.
The latest allegations appear to be the latest strand in that inquiry and the FT said that the identity of any borrowers and size of the alleged loans are unclear. The new allegations appear to be the latest strand in that inquiry, and the FT said that the identities of any borrowers and the size of the alleged loans were unclear.
Jenkins, who is on a potential £8.5m a year package, said: "The year just past was clearly a very difficult one for Barclays and its stakeholders, with multiple issues of our own making besetting the bank. I think it only right that I bear an appropriate degree of accountability for those matters, and I have concluded that it would be wrong for me to receive a bonus for 2012 given those circumstances."Jenkins, who is on a potential £8.5m a year package, said: "The year just past was clearly a very difficult one for Barclays and its stakeholders, with multiple issues of our own making besetting the bank. I think it only right that I bear an appropriate degree of accountability for those matters, and I have concluded that it would be wrong for me to receive a bonus for 2012 given those circumstances."
Earlier this week the bank had faced criticism for sounding out investors about a potential bonus of at least £1m - his maximum entitlement is 2.5 times his £1.1m salary - given the Libor fine and the cost of the payment protection insurance misselling scandal which has now reached £2bn for Barclays. The bank may also need to set aside more to compensate customers missold interest rate swaps. Earlier this week the bank had faced criticism for sounding out investors about a potential bonus of at least £1m – his maximum entitlement is 2.5 times his £1.1m salary – given the Libor fine and the cost of the payment protection insurance misselling scandal, which has now reached £2bn for Barclays. The bank may also need to set aside more to compensate customers missold interest rate swaps.
"I am aware of considerable speculation about, and public interest in, the question of whether I will be awarded a bonus in respect of my performance in 2012," he said."I am aware of considerable speculation about, and public interest in, the question of whether I will be awarded a bonus in respect of my performance in 2012," he said.
"To avoid further unnecessary public debate on this matter, 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," Jenkins said."To avoid further unnecessary public debate on this matter, 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," Jenkins said.
The new chief executive does not appear to have told the board before the appearance at the banking commission by Sunderland on Wednesday. Sunderland would only describe the possibility of a £1m bonus as speculation and stunned members of commission by saying he would still have handed Diamond a bonus for 2011 in spite of the Libor fine. The new chief executive does not appear to have told the board before Sunderland's appearance at the banking commission on Wednesday. Sunderland would only describe the possibility of a £1m bonus as speculation and stunned members of commission by saying he would still have handed Diamond a bonus for 2011 in spite of the Libor fine.
Stephen Hester, the boss of Royal Bank of Scotland, has already waived his 2012 bonus but it is not yet clear what will happen for his counterpart at bailed out bank Lloyds Banking Group, António Horta-Osório. Nor is it known whether the bosses of HSBC and Standard Chartered, both of which were hit by large penalties by US regulators last year, will be awarded or accept bonuses. Stephen Hester, the boss of Royal Bank of Scotland, has already waived his 2012 bonus but it is not yet clear what will happen for his counterpart at bailed-out bank Lloyds Banking Group, António Horta-Osório. Nor is it known whether the bosses of HSBC and Standard Chartered, both of which were hit by large penalties by US regulators last year, will be awarded or accept bonuses.