Diamond could leave with pay-off of £30m

Barclays chief executive's sudden departure sets up showdown with MPs in committee hearing today

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Indy Politics

Bob Diamond could be in line for a pay-off of between £20m and £30m after he was finally forced to quit as Barclays chief executive over the rate-fixing scandal.

He will give his side of the story today when he is cross-examined by MPs on the Treasury Select Committee over how much he knew about moves to manipulate lending rates.

Mr Diamond was followed rapidly out of the door yesterday by Jerry del Missier, who quit as the bank's chief operating officer. The growing storm has now claimed three scalps at Barclays, with Marcus Agius announcing his resignation as chairman on Monday. He will now remain with the bank to lead the search for a new chief executive before stepping down.

The prospect of Mr Diamond walking away with a massive "golden goodbye" will intensify the storm raging over Barclays. The bank refused to be drawn on its size, but Lord Myners, the former City minister, suggested it could be as much as £30m.

He said: "Defining the pay-off is complex because senior executives get paid in multiple ways. But I think the amount of money, if you include his share options, restricted share rights, matching share options, retained bonus, pension, life and medical cover, is probably in the order of £20m to £30m."

It emerged yesterday that Mr Diamond could be urged to return nearly £20m in unvested – or provisional – shares awarded to him in recent years. It is understood that Alison Carnwarth, chairman of the bank's remuneration committee, is to ask him to return the bonus.

Mr Agius said the search for a new chief executive would take "as long as it needs" and that "we will not compromise on quality".

Asked about Mr Diamond's severance package, he said Barclays' board had not yet had time to address the issue, although he denied the former chief executive could be due some £20m in long-term incentive schemes. "That figure certainly didn't come from me," he said.

But shareholders, who have seen billions of pounds wiped from the value of their investments, are sure to demand that at least part of the bonuses he is owed are clawed back from Mr Diamond. A large minority voted against Barclays' 2011 remuneration report at this year's AGM, a situation Barclays is desperate to avoid in future. The National Association of Pension Funds, which represents a number of Barclays' biggest shareholders, last night demanded any pay-offs be kept to a minimum.

Its chief executive, Joanne Segars, said: "Shareholders want any severance payments to be kept to a contractual minimum and clawback mechanisms for past pay and bonuses to be fully explored. There must be no reward for failure." She said this was because shareholders had lost significant sums of cash as a result of the scandal.

George Osborne, the Chancellor, who learnt of the planned resignation on Monday night, said Mr Diamond made the right decision for the bank and for the country.

In private, ministers expressed the hope for a wider clear-out at Barclays and that he would not be replaced by one of his allies. "The problem was not just Diamond but his cronies as well," one minister said. "They [Barclays] need to get rid of the gamblers. They need to have some stability and a safe pair of hands."

Among Mr Diamond's high-profile close associates still at the bank is Rich Ricci, chief executive of corporate and investment banking. In 2008 he led the bank's acquisition and integration of Lehman Brothers.

Mr Diamond, who received nearly £18m last year, remained defiant in his resignation statement. "The impression created by the events announced last week about what Barclays and its people stand for could not be further from the truth," he said.