Thousands of Barclays investment bankers have been handed pay rises in the past few days, ahead of the government’s 50% tax on bonuses.
The Guardian has reported the move is likely to increase tensions with lower-paid staff in Barclays’ high street operations who represent the majority of the workforce and are the public face of the bank.
It is understood that some of the pay rises are as high as 150% and are being backdated to June, but Barclays has tried to play this down.
Board director Bob Diamond, who has sold £5m worth of shares this year, defended “incentive compensation”, stating that reward plays a crucial part of running investment banks.
He has criticised the tax on bonuses as being against the G20 principles on pay which call for bonuses to be spread over three years and “clawed back” if performance turns sour at a later date.
About 23,000 investment bankers will benefit from the Christmas bonus.