Barclays to announce pay overhaul; bank declines comment

Barclays is planning a radical pay overhaul as part of a strategic review that could also see the group shed staff, the Financial Times said.

Barclays' new chief executive, Bob Diamond, aims to use contingent convertible bonds -- so-called CoCos -- to pay a large proportion of the bonuses to more than 1,000 of its top bankers, the newspaper said in an early copy of its Monday edition, citing unnamed sources close to the plans.

A Barclays spokeswoman in Hong Kong declined to comment.

Bankers' pay has become a hot topic in the United Kingdom as the British government is urging banks to curb bonus payments to quell anger about harsh spending cuts.

The cuts were imposed to trim a record peacetime budget deficit partly due to a bailout of some banks such as RBS during the financial crisis.

Barclays, one of Britain's "Big Four" banks, is set to announce the pay plan with its annual results in mid-February but still needs to secure regulatory approval from the Financial Services Authority, the City watchdog, according to the Financial Times

The FSA said it does not comment on individual firms.

The FT said bankers, not otherwise identified, told it that Barclays is also planning to announce a review of its operations, with Diamond likely to extend cost-cutting at its investment banking arm, Barclays Capital, across the group.

Diamond, who took over from John Varley as CEO this month, also plans to reshuffle some senior management roles, the FT said without elaborating further.

Earlier this month, a source told Reuters that the investment bank arm of Barclays is cutting 200 jobs in Britain after a review of its staffing levels following an industry slowdown.

Barclays Capital will cut a small number of jobs in the United States and Asia after the review.