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You can find the current article at its original source at http://www.guardian.co.uk/business/2013/apr/03/barclays-pay-profits-independent-review-salz
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| Barclays pay focused too much on profits, independent review concludes | Barclays pay focused too much on profits, independent review concludes |
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| Barclays was complex to manage, failed to create a group-wide culture and had pay policies that focused too much on profit generation, according to the top lawyer appointed by the embattled bank to review its culture. | Barclays was complex to manage, failed to create a group-wide culture and had pay policies that focused too much on profit generation, according to the top lawyer appointed by the embattled bank to review its culture. |
| In a 244-page report (pdf) – which cost £17m – compiled after interviews with 600 individuals in the wake of the Libor-rigging scandal, Anthony Salz calls on Barclays to strengthen its board, bolster its human resources function and link its pay to the "long-term success of the organisation". | |
| Salz said that the remuneration put in place during 10 years of rapid growth as Barclays rose to become a top-five bank rewarded "revenue generation rather than serving the interests of customers and clients". | Salz said that the remuneration put in place during 10 years of rapid growth as Barclays rose to become a top-five bank rewarded "revenue generation rather than serving the interests of customers and clients". |
| The board should have "set the tone" of culture from the top but "with the benefit of hindsight we believe that the Barclays board did not give sufficient attentions to this area", the report found, and was not able to penetrate the structure of the bank. | The board should have "set the tone" of culture from the top but "with the benefit of hindsight we believe that the Barclays board did not give sufficient attentions to this area", the report found, and was not able to penetrate the structure of the bank. |
| The human resources department did not "stand up" to the pay culture that developed, said Salz, who also described "an institutional cleverness" which made it difficult for shareholders to engage with the bank. | The human resources department did not "stand up" to the pay culture that developed, said Salz, who also described "an institutional cleverness" which made it difficult for shareholders to engage with the bank. |
| "Based on our interviews, we could not avoid concluding that pay contributed significantly to a sense among a few that they were somehow unaffected by the rules," the report said. "A few investment bankers seemed to lose a sense of proportion and humility." | "Based on our interviews, we could not avoid concluding that pay contributed significantly to a sense among a few that they were somehow unaffected by the rules," the report said. "A few investment bankers seemed to lose a sense of proportion and humility." |
| Barclays had an "edginess and strong desire to win", said Salz. "Barclays was sometimes perceived as being within the letter of the law but not within its spirit." | Barclays had an "edginess and strong desire to win", said Salz. "Barclays was sometimes perceived as being within the letter of the law but not within its spirit." |
| In opening remarks, Salz said: "Banks matter. Barclays is a major institution which daily touches the lives of millions, operates in more than 50 countries and employs 140,000. | In opening remarks, Salz said: "Banks matter. Barclays is a major institution which daily touches the lives of millions, operates in more than 50 countries and employs 140,000. |
| "Despite its turbulent recent history, Barclays has emerged from the financial crisis, somewhat against the odds, as one of the world's leading banks. But this has been achieved at a cost. | "Despite its turbulent recent history, Barclays has emerged from the financial crisis, somewhat against the odds, as one of the world's leading banks. But this has been achieved at a cost. |
| "Significant failings developed in the organisation as it grew. The absence of a common purpose or common set of values has led to conduct problems, reputational damage and a loss of public trust". | "Significant failings developed in the organisation as it grew. The absence of a common purpose or common set of values has led to conduct problems, reputational damage and a loss of public trust". |
| Salz made 34 recommendations – which included requiring closer co-operation with regulators and finding more board members with banking expertise. The chief executive should build a "cohesive senior executive team" and create an environment where staff felt they could escalate issues to senior management, he said. | |
| Sir David Walker, appointed chairman of Barclays in the wake of the Libor fine, said: "The report makes for uncomfortable reading in parts. That is bound to be the case when one asks for an independent examination of this kind, and we must learn from the findings". | Sir David Walker, appointed chairman of Barclays in the wake of the Libor fine, said: "The report makes for uncomfortable reading in parts. That is bound to be the case when one asks for an independent examination of this kind, and we must learn from the findings". |
| Salz is a director of the Scott Trust, owner of the Guardian. Rothschild, where Salz is also a director, received £1.5m in fees for his time. | |
| In his report, Salz noted that the bank came across as "too clever by half" and that its involvement in tax avoidance through its structured capital markets (SCM) division – which new chief executive Antony Jenkins insists is being shut down – operated in an "inherently risky business". The 100 people employed in SCM continued to work at Barclays but have been moved to other areas. |