Barclays CEO Bob Diamond To Lose Half Of Bonus Payout If Bank Does Not Improve

Huffington Post UK  |  By Posted: 19/04/2012 14:22 Updated: 19/04/2012 14:42

Bob Diamond

Barclays bank has caved to angry investors and changed its bonus structure for top executives, including CEO Bob Diamond, to better reflect the bank's performance.

Instead of receiving their full bonuses in shares over three years, Diamond and finance director Chris Lucas will now only receive half of the award each year until the bank meets performance targets - which it is currently failing.

The bank agreed to the change ahead of its shareholder meeting, it emerged on Thursday.

Diamond is currently scheduled to receive £900,000 from a total £2.7m bonus every year for three years - but now may receive only half that amount.

Lucas was expected to collect £600,000 per year, but will not receive it if the bank performs badly.

To receive their full bonus Barclays' return on equity must exceed the equity cost - a standard measure of a bank's success.

Unfortunately for Diamond and Lucas the cost currently stands at 11.5% and the return just 6.6% - meaning that the bank will have to improve significantly if their bonuses are to be paid in full.

Barclays said if that condition is not met, the potential pay-out will lapse if it is not met within three years from the date of the award.

The chief executive will also reportedly see the long-term incentive part of his pay package fall away, which may see his total package of salary, bonuses and tax benefits slide by 75% to no more than £5.5 million.

Aside from his bonus Diamond earned £1.35m in basic salary in 2011, as well as £2.25m in long-term incentive payments.

Barclays said it had been in talks with major shareholders since the remuneration details were published on 9 March.

The banking giant said Diamond and Lucas "volunteered" to subject their bonuses to new conditions in recognition of the "strength of opinion expressed by some shareholders".

The bank said: "Barclays is fully committed to ensuring that a greater proportion of income and profits flow to shareholders, notwithstanding that it operates within the constraints of a competitive market."

Barclays reiterated that it regards returns produced in 2011 as "unacceptable on an absolute basis".

The bank said it remains committed to delivering a 13% return on equity as soon as possible, although in February it admitted this would not happen in 2013 as previously hoped.

The shareholder rebellion over Barclays pay gathered pace earlier this month after leading investor group Pensions & Investment Research Consultants (Pirc) said Diamond should not receive "any bonus at all".

Pirc advised its members to vote against the bank's remuneration report, while Standard Life, Fidelity, Aviva and Scottish Widows, which account for 6.45% of the share register, are expected to do the same.


Check out the news of the day in pictures below:

  • Pictures Of The Day: 19 April

    Employees pose putting the finishing touches to new waxwork statues of Britain's Prince William (R) and Catherine, Duchess of Cambridge (L) as they are unveiled at Madame Tussauds in Blackpool, north-west England on April 19, 2012. The Duchess is dressed in an exact copy of the stunning Jenny Packham dress she wore for the ARK charity dinner, the first time she and Prince William appeared as a married couple. (Photo credit: ANDREW YATES/AFP/Getty Images)

  • Pictures Of The Day: 19 April

    Ekaterina Samutsevich, a member of female Russian punk band Pussy Riot waves as she is escorted to the court in Moscow, on April 19, 2012. Three members of the all-woman punk band 'Pussy Riot' were detained two months ago, after they climbed on the altar of Moscow's Christ the Saviour Cathedral - the country's central place of worship - and sang a song they called a 'Punk Prayer'. The women have been charged with hooliganism committed by an organised group - an unusually harsh charge for protesters. (Photo credit: ALEXANDER NEMENOV/AFP/Getty Images)

  • Pictures Of The Day: 19 April

    Police officers detain a supporter of female Russian punk band Pussy Riot outside the court in Moscow, on April 19, 2012, before the hearings on the Pussy Riot case. Three members of the all-woman punk band 'Pussy Riot' were detained two months ago, after they climbed on the altar of Moscow's Christ the Saviour Cathedral -- the country's central place of worship -- and sang a song they called a 'Punk Prayer'. The women have been charged with hooliganism committed by an organised group -- an unusually harsh charge for protesters. (Photo credit: ANDREY SMIRNOV/AFP/Getty Images)

  • Pictures Of The Day: 19 April

    Andy Murray of Britain plays a return shot to Julien Benneteau of France during their match at the Monte Carlo Tennis Masters tournament in Monaco, Thursday, April 19, 2012. (Photo credit: AP Photo/Lionel Cironneau)

  • Pictures Of The Day: 19 April

    France's Julien Benneteau reacts as he lays on the ground after a fall during his match againt's British Andy Murray during the Monte-Carlo ATP Masters Series Tournament tennis match, on April 19, 2012 in Monaco. Murray won the match after Benneteau injured both his right ankle and arm. (Photo credit: VALERY HACHE/AFP/Getty Images)

  • Pictures Of The Day: 19 April

    Two Iraqi women walk along a street in the capital Baghdad as a sand storm envelops the city on April 19, 2012. (Photo credit: SABAH ARAR/AFP/Getty Images)

  • Pictures Of The Day: 19 April

    Israelis pause during a two-minute siren in memory of victims of the Holocaust in the market in Jerusalem, Thursday, April 19, 2012. The day is one of the most solemn on Israel's calendar. Restaurants and places of entertainment shut down, and radio and TV programming focuses on Holocaust documentaries and interviews with survivors. (Photo credit: AP Photo/Bernat Armangue)

  • Pictures Of The Day: 19 April

    France's incumbent President and UMP ruling party's candidate for the 2012 presidential election, Nicolas Sarkozy speaks during a campaing meeting on April 19, 2012 in the French city of Saint-Maurice outside Paris. (Photo credit: MICHEL EULER/AFP/Getty Images)

  • Pictures Of The Day: 19 April

    Newly-recruited Thai women rangers take part in a training session at a military camp in Narathiwat province on April 19, 2012. More than 5,100 people have been killed - both Muslims and Buddhists - in attacks across Pattani, Yala and Narathiwat since unrest escalated in January 2004, according to Deep South Watch which monitors the violence. (Photo credit: MADAREE TOHLALA/AFP/Getty Images)

  • Pictures Of The Day: 19 April

    Philippine marines carry a colleague acting as fallen enemy during an ambush simulation as part of the two-week PH-US military exercise inside the Philippine marines training center in Ternate town, Cavite province, south of Manila on April 19, 2012. The Philippines hailed the start of major war games with the United States on April 16, as a timely boost to the two nations' military alliance amid growing regional security challenges. (Photo credit: TED ALJIBE/AFP/Getty Images)

  • Pictures Of The Day: 19 April

    One Direction fans wait at Auckland International Airport for the arrival of the band on April 19, 2012 in Auckland, New Zealand. One Direction peforms to sold-out audiences in Auckland on Saturday and Wellington on Sunday. (Photo credit: Phil Walter/Getty Images)

  • Pictures Of The Day: 19 April

    Indonesian militant Umar Patek arrive in handcuffs and escorted by armed police commandos at the Jakarta court on April 19, 2012 in the resumption of his trial. Patek is the suspected bomb maker of the deadly 2002 Bali bombing. (Photo credit: ROMEO GACAD/AFP/Getty Images)

  • Pictures Of The Day: 19 April

    An Iraqi soldier walks past the debris at the scene of two car bombs close to the governate in the northern oil-rich city of Kirkuk on April 19, 2012, which left several people dead. A wave of bomb attacks in four different provinces across Iraq killed at least 30 people security officials said. (Photo credit: MARWAN IBRAHIM/AFP/Getty Images)

  • Pictures Of The Day: 19 April

    Defence lawyer Vibeke Hein Baera (R) speaks to prosecutor Inga Bejer Engh (L) before Right-wing extremist Anders Behring Breivik arrives in room 250 of the central court in Oslo in Oslo on April 19, 2012. The trial against Anders Behring Breivik charged with committing 'acts of terror' when he slaughtered 77 people in twin attacks in July 2011 that shook the tranquil Scandinavian country to its core got under way Monday, 16 April. (Photo credit: DANIEL SANNUM LAUTEN/AFP/Getty Images)

  • Pictures Of The Day: 19 April

    A Myanmar woman hold a baby street in Yangon on April 19, 2012. The United States invited Myanmar's foreign minister and said on April 18 that democracy icon Aung San Suu Kyi, who is traveling abroad for the first time in decades, had an 'open invitation.' AFP PHOTO / Soe Than WIN (Photo credit: Soe Than WIN/AFP/Getty Images)

FOLLOW UK