Diamond in the rough climate

Bob Diamond's pay packet may not have reflected the rest of the world's money woes, but elsewhere City bonuses have fallen.

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Last Updated: 31 Aug 2010

The boss of Barclays Capital, the bank’s investment banking wing, took home almost £36m in pay and bonuses last year. Of that, his basic salary was a mere £250,000, so you can understand the bank wanting to throw in a couple of little extras: the figure comprises £21m in cash, bonuses and shares in addition to £14.8m from a three-year performance plan.

Readers fearing a recession shouldn’t bemoan Diamond’s bonus – if the credit crisis is going to lead us all into a period of belt tightening, then the man should at least be free to do so with a blingier belt. More seriously, while Barclays’ annual profits fell 1%, they still reached £7.08bn, and Diamond's division is said to have contributed a third towards that. Barclays would argue that if the man’s doing his job, it’s only fair he should be rewarded.

Elsewhere in the City, however, bonuses have fallen – by 13% compared with the previous January. The Office of National Statistics reports that as a weekly average, total bonuses fell from £786 to £681 for the first month. But in what is becoming a familiar story, the credit crisis seems to have had little effect so far – bonuses were still higher than in 2006, when the January average was £550. 

Here at MT we’re prepared to bet that more of this year’s bonuses will be saved than spent, so there’ll be less in the way of fast cars and champers. Lunch, meanwhile, is on Bob.

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