Bob Diamond waives £20m bonus but claims full salary

Jul 10, 2012
David Cairns

Ex Barclays boss will still walk away with £2m, bank chairman Marcus Agius tells MPs

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BOB DIAMOND, the Barclays CEO who resigned in disgrace after it emerged his bank had manipulated the Libor interest rate, will not take his £20m bonus, chairman Marcus Agius told the Treasury Select Committee today. Diamond's pay-out is now expected to be 'only' £2m.

However, even this figure is controversial as he will be paid a full annual salary of £1.35m on leaving, even though his contract stipulates just six months' pay. With his pension allowance and other benefits added, Diamond will walk away with £2m.

The Week reported earlier this month that Diamond might not take up his £20m in share options after intense lobbying from the bank's own remuneration committee – and in order to stick to a promise he made MPs.

Diamond appeared before the Treasury Select Committee last week – but he was also questioned in January 2011, when he bullishly said: "If any banking institution got into trouble, the ultimate place that you look at first is the chief executive..."

Asked then what penalty he would expect if he was in that situation, Diamond said: "I would assume that I would lose out by both losing my job and losing my shares in the company."

Diamond's prediction seems to have come true – though he resigned, rather than being fired. But the news about his bonus was not the only revelation in Agius's testimony to the Committee today.

The Independent claims that Agius's evidence suggests Diamond misled the Treasury Select Committee on at least two occasions when he gave evidence last week.

The first inconsistency highlighted by the paper centres on Diamond having told MPs the FSA (Financial Services Authority) was "pleased" with Barclays.

But a letter from the FSA sent to the bank in April this year, produced at the inquiry today, said Barclays had "used up" the organisation's "good will" and objected to a "pattern of behaviour over the last few years in which Barclays seems to be seeking to gain advantage through the use of complex structures".

Asked if this suggested Diamond had misled the Committee, Agius said it did not but described the relationship between the two institutions as "strained". John Mann MP felt the letter showed Diamond had "calculatedly and deliberately misled" Parliament.

The other point of contention was over Diamond's resignation. In his evidence last week, shortly after he stepped down, the former chief exec said he did not know if Agius had spoken to the regulators about Diamond quitting the bank.

But Agius today told MPs he had visited Diamond directly after a meeting with Mervyn King at which the Bank of England boss told Agius that Diamond no longer enjoyed his support. Asked if he had told Diamond about the meeting, he said he had.

The newspaper believes that Diamond – whose stonewall performance frustrated MPs last week – has more explaining to do, whatever the size of his golden parachute.

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