TOP staff at Barclays were paid one-third more than rivals, leaving some believing they were "unaffected by the ordinary rules", a report the bank com-missioned into its own failings revealed.
The 244-page document, produced by City lawyer Anthony Salz, recommends "transformational change" and has been published just two months after new chief executive Antony Jenkins vowed there is "no going back to the old way of doing things".
"The report makes for uncomfortable reading in parts," said Barclays chairman Sir David Walker. "Our initial review of the report's recommendations is they are substantially aligned with work already progressing under the Transform programme."
The report puts the focus on Barclays' investment banking arm just weeks after its chief executive Rich Ricci cashed in £17.8 million of shares from a bonus scheme.
Mr Salz said in his report: "Barclays survived the financial crisis as an independent institution, but it was close.
"The fight to survive seems to have accentuated the clever and competitive characteristics into something rather closer to aggressive and defensive."
The executive vice-chairman at finance house Rothschild set out 34 recommendations, some of which he said are already being implemented. He highlighted pay for the top earners at the bank.
"Compensation for the 'group of 70' was consistently and significantly above the median compared to peer banks. For example, in 2010 average pay to these executives was overall 35% more than the market benchmark for their positions," he said. This has come down but in 2011 was still 17% above the rest of the sector.
"Based on our interviews, we could not avoid concluding that pay contributed significantly to a sense among a few that they were somehow unaffected by the ordinary rules. A few investment bankers seemed to lose a sense of proportion and humility," he said.
Mr Salz criticised the way Barclays linked pay to revenues. "Overall, the pay structures gave the message to staff that the bank valued revenue over customer service," he said.
"If Barclays is to achieve a material improvement in its reputation, it will need to continue to make changes to its top levels of pay so as to reflect talent and contribution more realistically, and in ways that mean something to the general public."
Mr Salz's report, which cost £17m to compile, noted a "drift in standards" after 20 years of rapid growth at Barclays. He highlighted a "focus on winning" at its investment banking arm.
"It was sometimes underpinned by what appeared to have been an 'at all costs' attitude," Mr Salz wrote.
The bank, he said, "must improve its openness and transparency", warning regulators have found its approach "aggressive and overly clever". Mr Salz added: "We experienced directly some signs of the organisational reluctance to be open."
This, he said,was due to a feeling it is "under attack".
Barclays was hit by the departure of chief executive Bob Diamond and chairman Marcus Agius last summer in the aftermath of the bank being fined £290m for manipulating Libor rates.
It is also facing an inquiry into its 2008 fundraising, and has put aside £850m to compensate small firms mis-sold interest rate swaps and £2.6 billion to cover payment protection insurance mis-selling.
Ian Gordon, analyst at Investec, said of the report: "There is comparatively little here to cause fresh concern."
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