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Barclays today moved quickly to defend the £11.5 million pay and bonus package it has offered Bob Diamond to take over as chief executive from John Varley.
“We benchmarked his package against his peer group,” said chairman Marcus Agius. “Whether it's a British, German, French or US bank doesn't matter. There is a clear range of going rates for this kind of job. The governance of this appointment has been incredibly thorough.”
Agius also underlined the importance of a smooth succession with Diamond, who lost out to Varley seven years ago in the last race for chief executive. “Bringing in an outsider at any company is very, very disruptive,” said Agius. “We have an orderly handover between two men who have worked together on the same strategies for 14 years.”
Although Diamond will be one of the best-paid chief executives of a FTSE 100 company, the bank pointed out that most of his banking rivals around the world can earn uncapped long-term bonuses in the very best years.
Diamond's basic pay will rise from £250,000 to £1.35 million next year. He will also be eligible for an annual bonus of up to £3.375 million and a longer-term share bonus of £6.75 million.
Diamond, 59, will take over from Varley — who led Barclays through the financial crisis of the past three years — next March. Varley will stay on as an adviser for another six months until Sir John Vickers's Banking Commission report is delivered to Chancellor George Osborne.
Diamond has already made almost £100 million in the 14 years he has worked for Barclays, including a gain of nearly £27 million on his shares in the fund management arm Barclays Global which was sold last year.
Diamond made it clear that despite his background in investment banking he is a firm defender of the universal bank which combines retail and so-called “casino banking”. He said: “Barclays aims to be the most-respected globally integrated universal bank in the world. This is not about new strategy. This is about continuing to deliver for our clients on the strategy we have.”
His role at the top of Barclays Capital will now be split between his two lieutenants Jerry del Missier in New York and Rich Ricci in London.
Despite a 4% fall in Barclays share price — down 11.3p at 311.5p — the City broadly welcomed the appointment which comes as little surprise.
Angela Knight, chief executive of the British Bankers' Association, said: “With Bob Diamond taking over the helm from John Varley there will be welcome continuity from a formidable team which steered one of the UK's leading financial institutions safely and successfully through the recent global financial problems. It is also testament to Barclays' faith in the universal banking model bringing as it does Bob Diamond's investment banking expertise into the bank's retail operation.”
A Chelsea FC and Boston Red Sox fan Diamond is also a keen golfer and will move back from New York to London where he has lived with his wife Jennifer for most of the past two decades.
Reader views (14)
Dave Davies should check his facts before making dumb comments. He clearly knows less than nothing of what really goes on. No matter.
- Robert Marshall, London, 08/09/2010 19:08
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Bob Diamond made Barclays a global brand which can take on Goldman, Morgan et al. Pathetic bunch of British losers whingeing is disgusting. They took no UK taxpayer money and have made a profit for their shareholders in the toughest most competitive markets. Retail banking share is irrelevant because Barclays can buy or open branches whereas the useless RBOS, HBOS, Lloyds lot still thrash around in their mudpile. They offer an equally poor service but because they are losers on a grand scale its OK? How much was Hester paid ? For what?
Britain really is becoming a terribly sad place filled with bitter petty people who will never be competitive on the World stage.
- James MacLeod Ritchie, Oyster Bay Cove, 08/09/2010 00:09
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I only read the headlines 11.5 MILLION??????????
I'm both a Barclays customer and shareholder and this is madness. No one is worth that type of money full stop. You wonder why the world is falling to pieces?
- Tessa, London, 07/09/2010 17:59
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Lovely outpour of envy from the have-nots. Thing is, unless you are Barcley's shareholder, your say is not worth the 1s and 0s it is encoded with. 
- Legal Immigrant, City of London, 07/09/2010 15:45
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scotty, london, 07/09/2010 13:03
Dont worry about Rob Marshall. He is always ranting against Barclays and tends to be ill informed.
- Dave Davies, Basingstoke, Hants, 07/09/2010 14:01
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Scotty,
I think Robert refers to a) the cash sloshing about in customers (very low) interest paying accounts and, more importantly, b) the repo activities at the Bank of England where banks can borrow against the security of bonds etc they already hold at, again, very low rates.
- Stewart, London, 07/09/2010 13:39
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Robert,
Could you explain your personal dealings with Diamond? you sound like you deal with him quite a bit?
I am also curious about your claims of investment banking living off cheap funds? if that were ever true, that was before the crash and not after, where wholesale funds are not cheap.
- scotty, london, 07/09/2010 13:03
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I left Barclays Bank as a business and personal accounts after 17 years and should have done it years ago.
The sheer imcompetence of the mistakes are unbelievable.
Worst bank ever!!
- Mario Kempe, London, 07/09/2010 09:28
Worse than RBS and HBOS?
- Stephen C, London, 07/09/2010 11:58
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With regards to Marios comment, the problem with Barclays is that it was always run by decendents of the original families whose banks merged to form Barclays, most of whom were chinless wonders and many are still on the board.Hence Rob Marshalls comment-they know they are incapable of running the bank in the 21st century.
Everone is more than aware how hopeless their service is-just look at the Sunday papers money pages.
Maybe an outsider will kick a few backsides and rid the the bank of its bureaucratic culture.
- Stewart, London, 07/09/2010 11:52
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Anyone working for Barclays in the UK should consider moving as fast as possible as it's obvious that operations and back office are moving to the US, especially now Diamond has the whip hand. He has stated quite clearly that he cannot see beyond his ambitions in th US.
- Hansel, London, 07/09/2010 11:01
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The weakness of the Barclays boiard in giving the appointment to Diamond is a classic sell signal. The contributioon of Barclays capital has been made using dirt cheap cash from the banking side. Diamond is a loose canon with an ego not from this planet.
This is the last year of investment banking growth and Diamond know s sweet nothing about customer or client relations. Expect nothing but bull and bluster from Barclays now.
Varley took the job to stop Diamond and was as honest as can be soemtimes to his detriment. diamond as they say doesn't give a damn and will be a disaster for the Group.
- Robert Marshall, London, 07/09/2010 10:09
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11.6 million last year, is Bob Diamond " IN IT " with the rest of us, I think not?
- Sara Timothy, Hampton Court, 07/09/2010 10:00
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I left Barclays Bank as a business and personal accounts after 17 years and should have done it years ago.
The sheer imcompetence of the mistakes are unbelievable.
Worst bank ever!!
- Mario Kempe, London, 07/09/2010 09:28
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Got to have somebody to accept these extra large bonuses ,otherwise the banks will be awash with money and might even have to give the customer a square deal.
- Davey_Buoy, Chertsey, 07/09/2010 09:13
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