Barclays’ new boss is to overhaul the way bonuses are paid next month by giving senior staff loan notes that are dependent on the success of the bank, according to a report.
Chief executive Bob Diamond is considering paying a large proportion of bonuses in special contingent convertible bonds – also known as “cocos” – that are effectively worthless if the bank runs into trouble, the Financial Times said.
Issuing cocos would incentivise staff to ensure the bank is run in a sustainable way and would give the bank extra stability in times of stress, it was claimed.
Meanwhile, the Treasury’s negotiations with the UK’s biggest banks to hammer out an agreement on bonus payments and levels of lending to small businesses have stalled, and no agreement is now expected this week.
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