With the official lifting of the EU-imposed cap on bankers' bonuses, Barclays has become the first UK bank to allow employees to receive awards that are ten times their salaries.

Four months after shareholders at Barclays' AGM approved the plan to abolish the restriction that previously capped incentives to two times bankers' pay, the revelation was delivered to workers on Thursday through an internal message.

Following the removal of the cap by British financial authorities last year, all of the big UK lenders, including Barclays, Lloyds, and HSBC, are in the process of lifting the cap, which was one of the major reforms imposed by the EU in the wake of the financial crisis of 2007–2008.

They have been deliberating on the maximum ratios to offer staff, but they had previously submitted the change to a vote among shareholders at their AGMs in April and May.

Barclays has followed in the footsteps of the US bank JP Morgan by allowing UK bankers to now receive bonuses of up to 10 times their salary.

However, Barclays said bankers should not raise their hopes. “At an individual level, total compensation will continue to be performance based and market informed,” the memo seen by the Guardian said.

“Generally, the revised bonus cap should not change colleague expectations around total compensation. But it will give additional flexibility in how we use variable pay to recognise individual performance … supporting Barclays to attract and retain the best talent globally in a competitive market.”

The cap originally aimed to stamp out a bonus culture blamed for laying the ground for the financial crisis by encouraging short-term profits over longer-term stability. The hope was that, with less of an individual’s pay riding on performance, there would be a lower incentive for risky behaviour.

But UK politicians and regulators broadly opposed the rules, arguing that the clampdown would make it harder to attract skilled bankers, who would instead flee to rival hubs in New York, Singapore or Zurich. The then chancellor, George Osborne, tried to overturn the measure at the European court of justice in 2014.

Plans to scrap the banker bonus cap were initially announced by the then chancellor Kwasi Kwarteng during the Liz Truss government’s disastrous mini-budget in September 2022, though most big UK lenders indicated they were not consulted on the proposals. They were later approved last autumn by the then chancellor, Jeremy Hunt, and UK regulators including the Bank of England.

Labour has ruled out reversing the decision.

A Barclays spokesperson said: “The revised bonus cap will not alter the way Barclays sets its incentive pool, which is based on overall Group performance. It will allow us greater flexibility to differentiate individual bonuses within a small and defined group of colleagues, enabling Barclays to continue to compete effectively to retain and attract the best talent globally.”