Home Business NewsFinance News Bob Diamond waives £20m in potential bonuses

Bob Diamond waives £20m in potential bonuses

by LLB Editor
10th Jul 12 2:53 pm

Former Barclays boss Bob Diamond has waived up to £20m in potential bonuses but will still walk away with a pay-off around £2m, it has been revealed.

Barclays confirmed the American banker had waived his entitlement to deferred share bonuses worth a potential £20m.

The revelation came as Barclays chairman Marcus Agius answered questions from MPs on the Treasury Select Committee.

Agius said Diamond was told he no longer had the backing of the regulators by Bank of England governor Sir Mervyn King.

The Financial Services Authority (FSA) had changed its position on Diamond at the helm in the days after the rate-rigging scandal came under the spotlight.

The bank’s relationship with the FSA was “strained”, Agius said, however he refuted accusations they were in a “pretty desperate state”.

Diamond decided to waive his multi-million pound bonus entitlements after he stepped down as chief executive last week to rising anger from the general public, MPs were told.

His severance package adds up to a year’s salary and pension cash contribution. Diamond said he hoped the agreement “will help close this chapter and allow Barclays to move forward and prosper”.

The official spokesman of prime minister David Cameron said: “I think the decision to forgo the bonus is a sign that they understand public concerns and that they understand that there is a need for a change in the culture of banks.”

Business financial consultant Michael Ogilvie felt Diamond deserved some credit for turning down a substantial sum that he was contractually entitled to.

Ogilvie said: “From his point of view he is entitled to that money contractually, so the fact he is not taking it would be with his acceptance and that has to be recognised.

“To you and I, £2m is a fortune but he is used to earning that money so it is almost irrelevant, it is the principal behind it. The fact he has given it up has to be recognised.”

Ogilvie said the good work Diamond had done at Barclays should be remembered, even though he had “taken his finger off the pulse” during the Libor scandal.

When asked if the negative attitude the public expressed to bankers could be bad news for the City, Ogilvie said: “There is that danger that if it gets out of hand we could be seen to be anti-business.

“It is important business is allowed to get on and this country has benefited from that. The fact we are getting exports through the City is phenomenal and the last thing we want to do is weaken the City when it faces competition from America, Frankfurt and Shanghai.”

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