Diamond to get £2 million pay off
Bob Diamond will forego almost £20 million in bonuses and shares, the chairman of Barclays revealed today
Giving evidence to Parliament this morning Marcus Agius, the Barclays chairman, said Mr Diamond would be paid up to a year's salary and pension contributions worth “around” £2 million, despite being entitled to only six months' worth.
Mr Diamond, said he hoped the agreement “will help close this chapter and allow Barclays to move forward and prosper” after the bank was fined £290 million for attempting to fix the interbank borrowing rate Libor.
But that looked unlikely this morning after more revelations at the Treasury Select Committee.
It emerged that:
* Mr Diamond appears to have misled the Treasury Select Committee on at least two occasions when he gave evidence last week.
* Regulators had serious concerns about the governance of Barclays as recently as April this year.
* Mr Diamond only left Barclays after the Governor of the Bank of England told Mr Agius that the regulators had lost confidence in the chief executive.
Documents released by the Treasury Select Committee revealed that the Financial Services Authority wrote to the Chairman of Barclays expressing the regulator’s worry about the banks “pattern of behaviour”.
In a letter from the chairman of the FSA to Mr Agius in April this year Adair Turner wrote that: “I wish to bring to your attention our concerns about the cumulative impression created by a pattern of behaviour over the last few years, in which Barclays seems to be seeking to gain advantage through the use of complex structures, or through arguing for a regulatory approach with are at the aggressive end of interpretation of the relevant rules.”
He adds at one point that Barclays had “used up” the FSA’s “goodwill”.
But in his evidence last week Mr Diamond claimed that the FSA were “pleased” with Barclays.
Questioning Mr Agius John Mann stated: “Mr Diamond has been misleading this committee, hasn’t he?”
Mr Agius denied this but admitted that the relationship with the FSA had been strained.
“In our interaction (with the FSA) over regulatory judgements we tended to argue the toss,” he said.
“The extent to which we have done that was causing problems for the FSA.”
However Mr Mann said the letter showed Mr Diamond “Calculatedly and deliberately misled” Parliament.
Mr Agius said: “I can’t speak for his testimony.”
Mr Agius also described the moment when it became clear that Mr Diamond would have to stand down.
He said he received a call from the Bank of England advising him that Sir Mervyn King, the Governor wanted to see him and the most senior independent board member Sir Michael Rake.
“On Monday morning (it was conveyed to us) that the Governor wanted to see me and Sir Michael Rake at 6pm that evening.
“We had a conversation with him at which it was made very plane that Bob Diamond no longer enjoyed the support of his regulators.
“(He made clear he had) no power to direct us but told us in absolute term what situation was. You can imagine it was a shock to us. He was not capable of being misinterpreted.”
Mr Agius said he realised the board had “no choice” but to call for Mr Diamond’s resignation and together with Sir Michael.
“Mike Rake and I called on Bob Diamond. We explained what had happened.
“He was not in a good place as you can imagine. The conversation was not long. He asked for time to talk to his family. We left confident that he would make the right decision.”
By the following morning his resignation was announced.
Mr Tyrie pointed out that, in his evidence, Mr Diamond said he did not know if Mr Agius had spoken to the regulators and asked whether Mr Agius had told him about the conversation with the Governor.
Mr Agius confirmed he had told Mr Diamond of the conversation – but said again he could not comment on his evidence to MPs last week.
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