When it comes to bonuses, does Barclays really ‘get it’?

On days like today – with reams of press releases on new strategies and pamphlets on financial performance – it is easy to miss a few juicy facts. Or perhaps that is what Barclays hoped.

For amid the claims that Barclays “gets it” and plans to reduce bonuses, this little nugget. Last year, Barclays capped the cash portion of its bonuses at £65,000. In other words, when a banker was awarded a bonus, he (or she?) got the first £65,000 upfront, then the rest was deferred, half in cash and half in shares, with each half payable over the next consecutive two years.

But today, as the bank was busy telling us the overall bonus pot had fallen – which it had, from 42 per cent of total revenues to 38 per cent – what it failed to tell us was the upfront cash portion for bankers had in fact risen, from the old £65,000 to £185,250 – or nearly three times as much.

You can go out and spend it straight away, on a new car, or a diamond ring.

Now, why is that important? Well for obvious reasons, many would say it’s simply a grotesque sum, especially if you consider the cash portion for RBS and Lloyds is capped at £2,000.

But it’s equally important because cash is king. You can go out and spend it straight away, on a new car, or a chunk of your mortgage, a new TV or a diamond ring.

Cash is still king

Crucially, it can’t be clawed back if you are later found to have rigged inter-bank lending rates or mis-sold insurance products. And even if you haven’t done anything wrong, high cash payouts are exactly the type of thing that entice traders and bankers to go the extra mile to clinch the deal. As Barclays has learnt to its peril in the past – or so you would think.

Barclays was at pains today to point out that those bankers earning the big bucks, the managing directors in the investment banking unit, were not getting any bonuses for 2012 at all. No cash upfront or deferred. Nothing. And that may be the case. But that only applies to 1,200 extremely highly paid individuals, whose base salaries are likely above £1 million anyway.

High cash payouts are exactly the type of thing that entice traders to go that extra mile to clinch the deal.

So that means the rest – some 21,000 odd others in the investment bank – will benefit from the new rule. In other words, as of today, those getting bonuses could go home with £185,000 in upfront cash.

That’s on top of their salaries and safe in the knowledge that the rest of their bonus is tucked away for future payouts in the following years (when of course they will be receiving the cash portions of those year’s bonuses too).

In an age of austerity, with Barclays up to its neck in Libor and other mis-selling scandals, you have to question Antony Jenkins assertion today. Does Barclays really “get it”?