Barclays boss Bob Diamond agrees to bonus change after pressure from shareholders

 

Barclays boss Bob Diamond moved to quell a shareholder rebellion today by offering to change the terms of his £2.7 million annual bonus.

Ahead of next week's annual meeting, Mr Diamond and group finance director Chris Lucas have agreed not to receive half of their all-shares bonus award for 2011 if certain performance targets are not met within three years.

The concession comes amid mounting shareholder fury over a £5.7 million tax payment made on Mr Diamond's behalf and growing concerns over his bumper pay deal.

But the move, which threatens to dock Mr Diamond's overall pay for last year by £1.35 million, does not address previously-awarded long-term incentives which push up his total pay package to some £17.7 million.

Barclays said it had been in talks with major shareholders since the remuneration report was published on March 9.

The banking giant said Mr Diamond and Mr Lucas "volunteered" to subject their bonuses to new conditions in recognition of the "strength of opinion expressed by some shareholders".

The executives agreed that 50% of their deferred bonus awards, £2.7 million for Mr Diamond and £1.8 million for Mr Lucas, will not pay out until Barclays' return on equity exceeds its cost of equity. The return on equity was 6.6% in 2011, while cost of equity was 11.5%.

Barclays said if that condition is not met, the potential pay-out will be subject to lapse if it is not met within three years from the date of the award.

The bank has agreed the condition and said: "Barclays is fully committed to ensuring that a greater proportion of income and profits flow to shareholders, notwithstanding that it operates within the constraints of a competitive market."

Barclays reiterated that it regards returns produced in 2011 as "unacceptable on an absolute basis".

The bank said it remains committed to delivering a 13% return on equity as soon as possible, although in February it admitted this would not happen in 2013 as previously hoped.

The shareholder rebellion over Barclays pay gathered pace earlier this month after leading investor group Pensions & Investment Research Consultants (Pirc) said Mr Diamond should not receive "any bonus at all".

Pirc advised its members to vote against the bank's remuneration report, while Standard Life, Fidelity, Aviva and Scottish Widows, which account for 6.45% of the share register, are expected to do the same.

As well as Mr Diamond's pay package, a £5.7 million tax payment to Mr Diamond when he moved from the US to London to take the role of chief executive also sparked anger.

The chief executive will also reportedly see the long-term incentive part of his pay package fall away, which may see his total package of salary, bonuses and tax benefits slide by 75% to no more than £5.5 million.

PA

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

Pan Am Experience: A 'flight' back to the 70s

Tim Walker checks in and checks out a four-hour journey with a difference
Humans aren't alone in indulging in politics - it's everywhere in the animal world

Humans aren't alone in indulging in politics

Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
Crisp sales are in decline - but this tasty trivia might tempt back the turncoats

Crisp sales are in decline

As a nation we're filling up on popcorn and pitta chips and forsaking their potato-based predecessors
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
Barcelona 3 Bayern Munich 0 player ratings: Lionel Messi scores twice - but does he score highest in our ratings?

Barcelona vs Bayern Munich player ratings

Lionel Messi scores twice - but does he score highest in our ratings?
Martin Guptill: Explosive New Zealand batsman who sets the range for Kiwis' big guns

Explosive batsman who sets the range for Kiwis' big guns

Martin Guptill has smashed early runs for Derbyshire and tells Richard Edwards to expect more from the 'freakish' Brendon McCullum and his buoyant team during their tour of England
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'