'Low' bonus leaves Diamond in the rough?

Barclays' new chief exec Bob Diamond received only £6.5m of his expected £9m bonus for last year. It's a tough life...

by Dave Waller
Last Updated: 27 Apr 2011

The announcement comes weeks after the UK's biggest banks agreed to 'rein in' bonuses as part of the Project Merlin talks. In keeping with the Government's scheme, Barclays has also published details of its top five highest-paid senior execs. The winner of this (no doubt highly unpopular) accolade beat Diamond’s pay by £4m, walking home with a cool £10.9m – plus a little long-term incentive award of £3.3m. And that's just the highest-paid manager - who knows what they’re paying their best golden-boy traders...

Diamond, who also scored a £250k salary (this is for the period he was running the bank's investment banking and wealth management arms), has previously said that the time for remorse and apology for the size of bank bonuses is over, i.e. the rest of us should shut up and let them get on with it. Let's hope he's just as understanding about the fact that his pay packet isn’t quite as big as those of his pals - the biggest earners are assumed to be Jerry del Missier and the (ideally-named) Rich Ricci, his senior lieutenants at BarCap. But all in all, the best-paid five received £38.3m in bonuses, plus £10.8m in long-term incentive awards. (By way of comparison, each of them earned more than the aggregate pay of the entire cabinet.)

The remuneration report make for interesting reading. For one, they show how the bonus balance operated across different parts of the group. While staff at the retail operation received a combined £45m, its senior-level ‘code staff’ at Barclays Capital went home with a combined £406m. And that’s after a 12% cut to the bonus pool.

To be fair, Diamond can't complain too much. He'll also get a long-term incentive award of £2.25m, contingent on future performance, which would take his total pay package for 2010 to £9m - well above the £6.2m HSBC paid to chief executive Stuart Gulliver last year, say. He's also pocketing millions from share sales.

Cue the inevitable outrage from the likes of the Unite union, which has been arguing that there's no justification for such hefty pay. Barclays, however, will argue that Diamond is only getting the going rate for a job he's doing well. Indeed, after a year in which pre-tax profits rose 32% to £6.1bn, having received no direct support from the Government, we suppose the bank can pay its bosses in any way it pleases - it's just that, thanks to Project Merlin, they have to do it a bit more publicly. Although it's worth remembering that Merlin doesn't apply to traders - some of them will have been taking home muhc bigger bonues than Bob's...

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