Barclays has become the latest bank to substantially raise a cap on bonuses for its top bankers, an internal memo seen by Reuters showed on Thursday.
The lender’s senior bankers will now be able to earn payouts of up to 10 times their base salary, up from a two-to-one ratio previously imposed by the European Union back in 2014 when the UK was a member.
“The revised bonus cap will not alter the way Barclays sets its incentive pool, which is based on overall Group performance,” a spokesperson for the bank, who confirmed the contents of the memo, said.
“It will allow us greater flexibility to differentiate individual bonuses within a small and defined group of colleagues,” he added.
The change only applies to so-called material risk takers (MRTs), a regulatory designation for a class of employees whose activities could have a big impact on a firm.
It will not impact MRTs in the bank’s Irish-based entity which manages its European operations, who remain subject to the EU cap, the memo said.
Banks including Goldman Sachs and JPMorgan have already made similar moves to their variable compensation structures for their top UK-based bankers.
Barclays shareholders voted in favour of a proposal by the bank to amend the cap at its shareholder meeting this year.
The EU originally set the restrictions on pay in an effort to curb excess risk-taking at banks following the 2008 financial crisis.
Britain’s financial regulators confirmed last October they would give banks under their supervision greater freedoms to pay higher bonuses, in a bid to increase the competitiveness of the country’s financial sector.