Bob Diamond, the former Barclays chief executive, gave up £20m in bonuses yesterday as it emerged that the bank had been criticised by watchdogs for playing fast and loose with the rules just months before the Libor scandal broke.
Mr Diamond, who was castigated by MPs yesterday for his "deliberately misleading" testimony to the Treasury Select Committee last week and "cavalier" attitude toward Parliament, will still receive £2m.
News of the payout came as an incendiary letter to Marcus Agius, chairman of Barclays, right, from Lord Turner, chairman of the Financial Services Authority, was made public by the committee to coincide with Mr Agius's appearance. In it Lord Turner accused the bank of:
* Seeking to gain advantage "through the use of complex structures … which are at the aggressive end of interpretation of the relevant rules".
* Seeking to "spin its messages in a confusing and unhelpful manner" during financial stress tests last year.
* Using up "resources and goodwill" by continually arguing with watchdogs when rulings went against it.
* Draining trust away by its approach to issues including tax, regulation and accounting.
The letter came despite Mr Diamond's suggestion that relations with the FSA were good at a hearing of the select committee last week.
During the hearing with Mr Agius yesterday, MPs expressed fury over Mr Diamond's evidence last week. "It will look to us, and frankly it will look to everybody listening, like another example of a complete lack of candour to Parliament by the chief executive of Barclays," said the committee's chairman Andrew Tyrie, who accused Mr Diamond of a "cavalier attitude" towards Parliament. John Mann, a Labour committee member, said Mr Diamond would have to be recalled. "There's a constitutional issue here of whether we allow them to get away with it. I think we've got no choice (but to recall Mr Diamond). Parliament's reputation is at stake," he said.
Mr Diamond said in a letter to Mr Tyrie last night that he was "dismayed" that Mr Tyrie and some of his fellow committee members had suggested he was "less than candid".
The National Association of Pension Funds, which represents leading shareholders, said giving up the £20m was welcomed move but called for "a full review of pay policy" at Barclays. "This is an essential step in rebuilding confidence in the bank, and needs to go beyond senior executives alone."
The bonuses given up by Mr Diamond were "deferred" payments of shares for work he has already done. But he will still receive £2m, made up of a year's salary plus a payment in lieu of pension.Reuse content