Barclays latest bank to lift bonus cap

Barclays has announced a significant change to its compensation structure, lifting the cap on bonuses for senior bankers to a potential 10 times their base salary. This marks a departure from the previous two-to-one ratio imposed by the EU in 2014, a regulation that was established to mitigate excessive risk-taking in the banking sector following the 2008 financial crisis. The decision was communicated through an internal memo obtained by Reuters. A spokesperson for Barclays clarified that the revised bonus cap will not fundamentally alter the bank's approach to setting its incentive pool, which remains tied to the overall performance of the Group. Instead, the new cap will provide the bank with increased flexibility to differentiate bonuses among a select group of employees, allowing for more tailored compensation based on individual contributions. This move aligns Barclays with other major financial institutions, such as Goldman Sachs and JPMorgan, which have also opted to remove similar restrictions on bonuses. The shift in policy comes after Barclays shareholders approved the proposal to eliminate the cap during a meeting earlier this year, reflecting a broader trend among banks to enhance their compensation packages. The original EU restrictions were aimed at preventing reckless behavior in the banking industry, but as the financial landscape evolves, banks are reassessing their compensation strategies to attract and retain top talent in a competitive market.