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
News
The two faces revealed by the ultraviolet light
newsScholars left shaken after shining ultraviolet light on 500-year-old Welsh manuscript
News
Rosamund Pike played Bond girld Miranda Frost, who died in Die Another Day (PA)
news
Arts and Entertainment
books
News
newsHow do you get your party leader to embrace a message and then stick to it? With people like this
ebooks
ebooksA special investigation by Andy McSmith
  • 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: Marketing Manager - B2B, Corporate - City, London

£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...

Neil Pavier: Commercial Analyst

£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...

Loren Hughes: Financial Accountant

£45,000 - £55,000: Loren Hughes: Are you looking for a new opportunity that wi...

Sheridan Maine: Finance Analyst

Circa £45,000-£50,000 + benefits: Sheridan Maine: Are you a newly qualified ac...

Day In a Page

General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?
How Tansy Davies turned 9/11 into her opera 'Between Worlds'

How a composer turned 9/11 into her opera 'Between Worlds'

Tansy Davies makes her operatic debut with a work about the attack on the Twin Towers. Despite the topic, she says it is a life-affirming piece
11 best bedside tables

11 best bedside tables

It could be the first thing you see in the morning, so make it work for you. We find night stands, tables and cabinets to wake up to
Italy vs England player ratings: Did Andros Townsend's goal see him beat Harry Kane and Wayne Rooney to top marks?

Italy vs England player ratings

Did Townsend's goal see him beat Kane and Rooney to top marks?
Danny Higginbotham: An underdog's tale of making the most of it

An underdog's tale of making the most of it

Danny Higginbotham on being let go by Manchester United, annoying Gordon Strachan, utilising his talents to the full at Stoke and plunging into the world of analysis
Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police

Steve Bunce: Inside Boxing

Audley Harrison's abusers forget the debt he's due, but Errol Christie will always remember what he owes the police
No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat