British-based Barclays Capital may be a bellwether for Wall Street’s bonus season.
The bank is ratcheting up stock payments to its execs and axing the amount of cash it pays out in bonuses this year — a move that may influence US-based firms.
Barclays’ employees, which number roughly 9,000 here in the city, are said to be unhappy about the plan, which could leave some seeing just a tenth of their expected bonuses land in their bank accounts next January, after taxes are taken out.
Although decisions have yet to be finalized, sources say that the bank, which bought Lehman Brothers out of bankruptcy, could pay 75 or 80 percent of its compensation in stock and options that vest over periods of as long as five years.
The portions of the bonuses paid in cash can also be clawed back, sources said.
Regulation of bank pay in the US and globally has become a hot issue as governments look to dampen big payouts at banks that had been teetering on the edge of collapse last year and accepted taxpayer-assisted rescues.
Many financial firms are now on pace to pay out even fatter bonuses to its bankers and traders.
New York-based Goldman Sachs is expected to pay employees more than $21 billion in bonuses for this year after accepting $10 billion in money from the government’s Troubled Asset Relief Program.
Like Barclay’s, Goldman will likely offer more compensation in stock this year, with its top earners getting paid almost entirely in stock that will take years to vest.
Barclays tighter bonuses come as some of the biggest British banks agreed to curb bonus payments at a meeting last month among the 20 largest industrialized countries.
“The UK’s top five banks have committed to leading the way in implementing reforms to bank remuneration agreed by the G20,” British Finance Minister Alistair Darling said in a joint statement with the banks.
Some banks talked about handing out compensation of 40 to 60 percent in stock and offering no multi-year guarantees.
A Barclays spokesman said no final decisions had been made on bonuses.
“We have stated that we will comply with the G20 guidelines and we will be competitive on compensation,” he said.
Barclays did not accept assistance from the British government.