Barclays defends £6.5m bonus for Bob Diamond

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The Independent Online

Barclays claimed yesterday that it had shown restraint on pay as it revealed that its chief executive, Bob Diamond, was paid a bonus of £6.5m for 2010.

In its remuneration report, the bank also indicated that its joint heads of investment banking were each paid about £14m. In total, the top five non-board earners shared £49m.

Mr Diamond's all-shares bonus covered last year, when he headed the Barclays Capital and wealth management divisions. He was in line for a bonus of about £9.5m but is said to have asked the remuneration committee to cut the payout in the name of restraint.

He also earned a £250,000 salary and was awarded a £2.25m long-term payment based on future performance. As chief executive he will be paid a £1.35m salary, which is £250,000 more than his predecessor, John Varley.

Mr Varley, who stood down on 1 January, enjoyed his biggest payday as chief executive, earning £3.85m including a £2.2m cash-and-shares bonus, also his biggest ever.

Mr Varley and Mr Diamond turned down their bonuses for 2009 and 2008.

Their 2010 pay was dwarfed by the earnings of Rich Ricci and Jerry del Missier, Mr Diamond's chief lieutenants at Barclays Capital, who now run the business jointly.

Each of the two investment bankers earned between £10.5m and £11m in salary and bonuses and were awarded £3.35m in long-term incentives based on future performance.

The pay details were revealed under government requirements to publish the earnings of the top five non-board executives.

The other three big earners – thought to be retail banking boss Antony Jenkins, wealth management head Tom Kalaris and risk chief Robert le Blanc – shared £20.6m in salary, bonus and long-term awards.

Sir Richard Broadbent, the remuneration committee chairman, said total bonuses were lower than for 2009 and that the bank consulted shareholders more widely than before.

"We committed to showing responsibility in pay in 2010 and beyond. Our decisions for 2010 reflect this," Sir Richard said.

But John Mann, the Labour MP for Bassetlaw and member of the Commons Treasury Committee, said: "There is no restraint. This isn't an open market; it's an oligarchy. I find this extraordinarily greedy." Mr Mann said he and other committee members would favour calling Mr Diamond to explain the payouts after he promised restraint.

Mr Diamond's pay package makes him the top-earning UK bank chief executive, out-earning the £5.2m bonus revealed last week for HSBC's Stuart Gulliver. The Government has put banks under pressure to cut back on bonuses after bailing out the sector and introducing austerity measures that will reduce living standards for ordinary people.

The banks had hoped to head off public and political hostility by agreeing to moderate pay and adopt new lending targets under their Project Merlin agreement with the Government. But the settlement was widely mocked and Barclays' paydays come soon after an attack by the Governor of the Bank of England on bonuses. At the weekend, Mervyn King accused banks of ripping off customers to maximise short-term profits and bonuses. He said further reform of the industry was needed to avoid another crisis.

Mr Diamond's multimillion-pound bonuses atBarclays Capital were legendary and helped make him one of the main targets for public anger during the financial crisis.

Barclays in numbers

£6.5m Bob Diamond's bonus for 2010

£3.85m Former chief executiveJohn Varley's earningslast year in his biggestpayday while in the job

£14m The total pay for each of Barclays' investment banking leadership duo

£6.1bn Barclays' 2010 pre-tax profit, up 32%

£49m pay shared by Barclays' top five non-board executives

£47 The loss on £100 invested in Barclays five years ago compared with a £26 profit if the money was invested in the FTSE 100 index

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