LONDON (Reuters) - Barclays (BARC.L) needs to further rein in pay for top staff if it wants to repair its reputation after an interest rate rigging scandal, a report commissioned by the bank said on Wednesday.
“We concluded that the reputational problems for Barclays stem in part from the perception that, at least in the UK, some bankers have appeared oblivious to reality,” said the report by veteran lawyer Anthony Salz.
“If Barclays is to achieve a material improvement in its reputation, it will need to continue to make changes to its top levels of pay so as to reflect talent and contribution more realistically, and in ways that mean something to the general public.”
The rock n‘roll style rewards earned by top investment bankers at Barclays prompted an outcry among austerity-weary Britons last year after the bank was fined $450 million for its role in manipulating global benchmark interest rates.
The rate rigging scandal prompted the departure of Bob Diamond as CEO. A former Wall Street trader, Diamond was paid 6.3 million pounds in 2011 despite a recommendation from the company’s then head of remuneration that he should not get a bonus.
Under new CEO Antony Jenkins, Barclays is trying to reclaim the reputation of Barclays, which was criticized by the country’s financial regulator as being too aggressive.
Its annual report for 2012 went in to unprecedented detail about its pay plans.
Jenkins opted not to take a bonus for 2012, but he took pay and share awards totaling 2.6 million pounds and the bank paid another 428 of its employees 1 million pounds or more that year.
Chairman David Walker said the Salz report was rightly critical.
“The report makes for uncomfortable reading in parts,” Walker said in a statement. “Our plan is to report back in advance of the AGM on how we intend to implement the recommendations made, particularly those that go beyond the scope of work already underway,” he said.
Barclays hired Salz to review its culture and business practices last year. He spent more than 30 years as a corporate lawyer with Freshfields Bruckhause Deringer, including 10 as senior partner.
Reporting by Matt Scuffham; Editing by Tom Pfeiffer