Barclays was engulfed in scandal again last night after reports emerged of an £8.75m payoff to the most senior executive to authorise the false submission of Libor interest rates. Jerry del Missier resigned last month but is said to have arranged the payoff in the days before his departure. The move stands in stark contrast to a decision by his boss, Bob Diamond, to give up deferred bonus payments worth up to £20m.
Last night a political storm was brewing over the payment, which Barclays repeatedly refused to deny. "We're making no comment," a spokesman said.
A Labour member of the parliamentary inquiry into banking standards, however, said such a payoff would be "totally inappropriate". Andrew Love said: "In the light of the circumstances in which Mr del Missier left Barclays it is totally inappropriate that he should be rewarded with a substantial payoff. Since he was the trusted lieutenant of Bob Diamond you would have thought he would have taken a similar stance to Bob Diamond."
The TUC also reacted with fury. Its general secretary, Brendan Barber, said: "If these figures are true, this takes rewards for failure to a whole new level. The City desperately needs to improve its stock with the British public and excessive payoffs like this won't help one bit. Instead banks need to focus on the real job of putting Britain back to work by getting credit into cash-starved companies. With the UK in the depths of a double-dip [recession], bankers should be concentrating less on their pay and bonuses, and more on getting the economy growing again."
The news came just hours after Alison Carnwath resigned as chairwoman of Barclays' remuneration committee, which is responsible for setting top executives' pay.
Her committee's decision to award Mr Diamond a £6.5m bonus in 2011 despite the bank missing his own targets sparked a shareholder revolt at the bank's annual meeting. Her opposition to the payment was over-ruled.
Mr del Missier was reportedly due the money – part of a long-term incentive award – in March, but deferred it amid the simmering fury over bankers' pay at the bank's request. This meant it would not have had a legal basis to deny him the money although he would have been at liberty to forgo the payment in a similar manner to his boss.
Mr del Missier was one of Barclays' best-paid staff but because he was not on the board it is technically under no obligation to disclose his pay.
The banker, who worked with Mr Diamond to build Barclays Capital into a major force in investment banking, revealed that while they were close colleagues they were not close friends at a hearing of the Treasury Select Committee.
This week Barclays announced the appointment of a senior banker from Rothschild's, Anthony Salz, to review its business practices which is likely to cover the way its bankers are paid.Reuse content