The heads of Britain’s Barclays and Spain’s Banco Sabadell are the latest European bank captains to sacrifice part of their salaries as a gesture of compassion and solidarity in the face of the widespread misery unleashed by the global pandemic.
Barclays said Chief Executive Jes Staley, Chairman Nigel Higgins and Chief Financial Officer Tushar Morzaria would all donate a third of their fixed pay for the next six months. The money will go into a new £100m community aid fund launched by the bank.
Sabadell and its British subsidiary TSB said that senior management of both banks would give up their bonus awards for 2020. This will allow the banks to better reward junior staff who are helping customers deal with the virus.
“It is an act of responsibility at a time when all of us need to act with the utmost commitment and solidarity,” Sabadell chairman Josep Oliu said.
Sabadell’s action on bonuses echoes similar decisions undertaken by senior executives at Spanish banks BBVA (BBVA.MC) and Caixabank (CABK.MC). Two weeks ago, Santander also said its top executives would take a 50% pay cut.
Growing demand for coronavirus pay cut
The havoc wrought by the coronavirus crisis has given investors leverage to put new limits on CEO pay packages.
Financial regulators in the UK have also leaned on banks to curtail bonuses. Andrea Enria, chairman of the European Central Bank’s supervisory board, has called on the sector to exercise “extreme moderation on variable remuneration”.
The Bank of England has requested all major UK banks to scrap cash bonus payments to executives and risk takers, as part of capital conservation efforts that also included ditching dividends.
Barclays and none of the other British banks have published details on how they intend to shake up boardroom compensation to comply with the Bank of England’s request.