October 23, 2013 / 4:09 PM / 4 years ago

Barclays considers new pay plan to counter EU bonus cap

LONDON (Reuters) - Britain’s Barclays Plc (BARC.L) is considering revamping its pay structure to work around new European rules that cap bonuses for senior staff, a person familiar with the matter said.

The bank may give senior staff an additional monthly cash sum - on top of base pay and variable bonuses - which would be reserved for those occupying specific risk-taking roles.

The payment, which would not be included in pension calculations, would help the bank control its fixed costs while keeping within proposed new European Union rules, the person said on Wednesday.

Staff would forego the premium payment if they moved to a role not designated as a key risk-taking function.

The source said the bank is still discussing the proposals with investors and no decision had been made whether to go ahead with the plan.

From the start of next year, new EU rules will limit the bonus of senior staff to twice their fixed pay in an attempt to curb excessive payouts and risk-taking which critics blame for helping trigger the financial crisis of 2008-9.

The UK government and many banks in London have opposed the curbs, saying it will force up fixed salaries, provides less scope to claw back pay and could see staff join rivals not constrained by the rules.

The EU has said the cap will apply to risk-taking staff and is finalizing rules on which staff will be affected, typically those earning more than 500,000 euros a year.

The rules are expected to extend beyond the current definition of “code staff” in Britain, which covers all people in significant risk-facing positions.

UK banks had about 1,300 code staff last year, including 393 at Barclays, which is expected to be the most severely affected by the clampdown on bonuses because of its big investment bank.

Barclays declined to comment.

Reporting by Steve Slater; Editing by David Cowell

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