---
title: "Barclays Becomes First UK Bank to Remove Bonus Cap, Allowing Payouts Up to 10 Times Salaries"
publisher: "Stockmark.IT"
author: "Stockmark.IT Website"
published: "2024-08-09T09:32:04+00:00"
modified: "2024-08-09T09:32:04+00:00"
date: 2024-08-09
canonical: "https://stockmark.it/barclays-becomes-first-uk-bank-to-remove-bonus-cap-allowing-payouts-up-to-10-times-salaries/"
category: "Banking"
categories: ["Banking"]
image: "https://i0.wp.com/stockmark.it/wp-content/uploads/barclays-bankers-bonus.jpg?fit=1200%2C800&quality=89&ssl=1"
format: "news"
language: "en-GB"
---

# Barclays Becomes First UK Bank to Remove Bonus Cap, Allowing Payouts Up to 10 Times Salaries

**Published:** August 9, 2024
**Author:** Stockmark.IT Website
**Categories:** Banking
**Featured image:** ![barclays-brothers](https://i0.wp.com/stockmark.it/wp-content/uploads/barclays-bankers-bonus.jpg?fit=1200%2C800&quality=89&ssl=1)

---

In a significant move, Barclays has become the first UK bank to officially lift the cap on bankers’ bonuses, a restriction originally imposed by the EU. This decision, announced through an internal memo to staff on Thursday, allows payouts worth up to 10 times bankers’ salaries.

The move comes four months after shareholders at Barclays’ AGM approved dropping the measure, which previously limited bonuses to two times salaries. Following Britain’s financial regulators scrapping the restriction last year, all major UK lenders, including Barclays, Lloyds, and HSBC, are in the process of lifting the cap. This reform was one of the key measures introduced by the EU in the wake of the 2007-08 financial crisis.

The banks had already put the change to shareholder votes at their AGMs in April and May but have been deliberating on the maximum ratios to offer staff. Barclays has matched the US bank JP Morgan by allowing up to 10 times salary.

Despite this change, Barclays has cautioned bankers not to raise their expectations. The memo seen by the Guardian stated, “At an individual level, total compensation will continue to be performance-based and market-informed. Generally, the revised bonus cap should not change colleague expectations around total compensation. But it will give additional flexibility in how we use variable pay to recognise individual performance, supporting Barclays to attract and retain the best talent globally in a competitive market.” The bonus cap was initially aimed at curbing the bonus culture blamed for setting the stage for the financial crisis by prioritising short-term profits over long-term stability.

The intention was that with less of an individual’s pay dependent on performance, there would be a reduced incentive for risky behaviour. However, UK politicians and regulators largely opposed the rules, contending that the clampdown would hinder the ability to attract skilled bankers, who would instead migrate to rival hubs in New York, Singapore, or Zurich. Plans to scrap the banker bonus cap were first announced by Kwasi Kwarteng during the Liz Truss government’s ill-fated mini-budget in September 2022, although most large UK lenders indicated they were not consulted on the proposals.

The plans were subsequently approved last autumn by Jeremy Hunt, then chancellor, and by UK regulators, including the Bank of England. Labour has stated that it will not reverse the decision. A Barclays spokesperson clarified, “The revised bonus cap will not alter the way Barclays sets its incentive pool, which is based on overall group performance. It will allow us greater flexibility to differentiate individual bonuses within a small and defined group of colleagues, enabling Barclays to continue to compete effectively to retain and attract the best talent globally.

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