Barclays has doubled its CEO’s pay to £10.5 million, or about US$13 million.

Meanwhile, top performers will get a share in the bank’s £1.9 billion bonus pool and the broader workforce of 90,000 will receive £500 worth of shares following a strong financial performance in 2024.

Surge in compensation amidst soaring profits

The bank’s annual report reveals that its group chief executive, CS Venkatakrishnan, saw his pay package soar by 127%, up from £4.64 million in 2023.

This jump follows an increase in total income from £1.5 billion to £26.8 billion last year.

The pay hike is primarily driven by long-term bonuses and a rising share price, with shareholders set to vote on a revised pay structure allowing the CEO to earn over £14 million annually through increased bonuses while reducing his base salary.

Venkatakrishnan reflected on the bank’s performance, stating: “In 2024 we met our financial targets, delivering for our customers and clients, with operational and financial performance improvement driven by disciplined execution of the three-year plan.”

A growing pay gap

The CEO’s compensation package now stands at 182 times the median salary of £57,854 for Barclays UK employees – up from 82 times the previous year.

Barclays has been under scrutiny in the past regarding its CEO compensation, particularly in light of the growing disparity between executive pay and that of average employees.

The widening disparity is attributed to the vesting of long-term incentive payments. Below is a breakdown of Venkatakrishnan’s remuneration:

• Base salary: £2.935 million
• Annual bonus: £2.219 million
• LTIP payments: £5.137 million
• Pension top-up: £147,000
• Taxable benefits: £95,000

His base salary, however, will be reduced to £1.59 million under a restructured pay scheme, aligning with Barclays’ evolving compensation strategy.

The package has sparked discussions about the fairness and sustainability of such high compensation levels, especially when compared to the wages of average employees within the bank.

Barclays’ nod to employee ownership

As a goodwill gesture celebrating the bank’s success, Barclays is rolling out £500 in shares for the vast majority of its employees, excluding managing directors and material risk takers.

“To align their efforts fully with our shareholders’ interests, our colleagues need to participate in the ultimate outcome of their efforts – the change in our share price,” Venkatakrishnan said of the importance of equity participation.

He further reflected on the decline of broad-based share ownership in the UK, stating that Barclays’ initiative aims to reverse this trend.

Barclays’ robust performance is evident in its £8.1 billion pre-tax profit for 2024, a 24% increase from £6.6 billion in 2023.

The bank’s remuneration committee expressed confidence that the compensation strategy aligns with its overarching philosophy and balances stakeholder expectations and financial outcomes.

While Barclays’ executive pay hike will no doubt spark debate, the bank is making strides towards boosting employee engagement through equity participation.

As financial markets continue to reward strong corporate performance, two questions remain: how will shareholders react to the growing executive pay gap, and will this move truly foster a culture of shared success?