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Friday, 31 October 2008

Why did Barclays get their funding from the Middle East?

In 2003, Roger Jenkins was paid more than £19.5m last year by his bosses at Barclays Capital. That figure made Jenkins the highest-paid employee of any FTSE company and almost certainly the best-paid investment banker in the City that year. His package dwarfed the £3m paid in that year to Matt Barrett, former chief executive of Barclays, and was more than three times the total paid to the bank's five executive directors.

So what did Jenkins do to earn his fabulous salary? It is a question that Barclays Capital would prefer was not asked because, in its simplest form, Jenkins and colleagues Ian Abrahams and Mike Keeley spend their days working out clever ways to slash the tax bills of companies, including Barclays. His two colleagues are believed to have earned about £10 million each last year. Every bank in the City employs a structured finance division that performs the same role, but none is believed to be anywhere near as successful as either Barclays Capital or Jenkins.

Some competitors calculate that Jenkins' team generated more than 100% of Barclays Capital's profits in 2002 - suggesting that other key operations in the division operated at a loss - and probably produced more than half the surplus for 2003. Barclays Capital said these figures were 'gross exaggerations' and claimed Jenkins was in charge of four businesses, of which 'tax-efficient financing' was only one. These, said a spokesman, 'generate less than 20% of the bank's revenues'.

Not something you would want to share with the government.


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