Salz Review of Barclays – and you thought management consultancy was expensive?

5 Apr

Salz review

There has been some excellent press commentary on this since it was published yesterday. The FT, in particular, has excelled itself – Jonathan Guthrie in Lombard had a spoof sermon from Rev Salz – the visiting preacher at St Barcalys Beyond the Pale ( see and Lex has an excellent video (Q from Stuart Kirk, Head of Lex – “Is it simply a statement of the “bleedin’ obvious” – A from Oliver Ralf of Lex – “Yes”; see for more).

So I will confine myself to two points. One is cost – where the first figure I saw reported was £14.5m, which then rose mysteriously to £17m – presumably the VAT-inclusive price. Now as Anthony Salz’ firm (Rothschild) was “only” paid £1.5m in lieu of his services, that leaves a whole £13m unaccounted for. Comparable consultancy fees from a strategy boutique? Running the slide rule over it, I reckon about £2m should do it. So if I were a shareholder I would be asking some questions – a good starting point might be to get the non-execs over the period covered by Salz to pay for it, since he is basically commenting on their weaknesses.

The second point is not unique to Barclays, and is about changing the rules of the game. As you read through the report, you realise that, over the period from 2005 to 2012, the rules of the game changed – it was as if, coming out after half time, Barclays was faced with an Alice in Wonderland world where the goalposts were smaller and someone had abolished the offside rule. HMRC’s attitude to tax was a good example (see chapter 6). Barclays failed to adapt in time. Businesses need monitoring systems which tell them not only what their competitors are up to but also when the mindset of key stakeholders such as regulators undergo a sea change.

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