LONDON – Britain’s troubled Barclays bank needs to further overhaul its pay policy after an “overly generous” bonus culture was blamed for problems that sparked last year’s Libor rate-rigging scandal, an independent review said Wednesday.
The report was carried out by top lawyer-turned-banker Anthony Salz, who was commissioned by Barclays in July 2012 to examine the bank’s culture in the wake of the damaging Libor affair.
The Salz review — which comprises 24 pages and cost £17 million ($26 million) to produce — found that excessive pay and short-term incentives had convinced some staff that they were “unaffected by the rules” after a long period of rapid growth.
Short-term success fed into the pay, bonuses and long-term incentive plans of the senior executives and those who made the money, especially in the investment bank,” the Salz report said Wednesday. “At a time of growth for almost everyone, the cracks were not noticed by Barclays, by the other banks or, to a significant extent, by the regulators. Without being aware of it, Barclays allowed a drift in its cultures.”