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Barclays' boss told to 'tone down' his bonus
Barclays' chief executive Bob Diamond is advised not to become a 'lightning rod' over banker bonuses.
An unidentified top 10 shareholder in Barclays (BARC.L) has called on the bank's chief executive Bob Diamond to 'tone down' his bonus following his refusal last week to say what it would be.
According to the Sunday Times the leading shareholder said: 'Bob Diamond is clearly doing a good job, but Barclays' senior people have paid themselves very well for a number of years and in the current environment he would do well to tone it down.'
The comment comes after the bank revealed on Friday that it would slash overall bonus payments at the bank by a quarter to £2.5 billion and that total bonuses for top executives would be almost halved. However, details of what Diamond and other directors will get is not being announced until the bank's annual report is published next month.
The anonymous commments to the Sunday Times reveal the anxiety in the City on the issue following the controversy over Royal Bank of Scotland (RBS.L)'s chief executive Stephen Hester, who was forced to drop his near £1 million share bonus after initially accepting it.
Another institutional investor told the paper: 'We have been saying, "Don't make yourself a lightning rod. You have to try to help yourself with the publicity whether you like it or not."'
Critics have pointed out that although bonuses at Barclays Capital are being cut by a third, this is merely in line with the slump in profits at the investment banking division that Diamond used to run. Diamond received total bonuses of £6.5 million in 2010, his last year in charge of Barclays Capital.
'This appears to be very close to business as usual,' said Robert Talburt, chairman of the investment committee at the Association of British Insurers. 'It is not the signal of the change required to improve the investment case at the bank.'
Barclays' profits fell 3% to £5.9 billion last year. The proportion of pre-tax profits spent on bonuses fell to 28% from 33% in 2010.
Shares in Barclays rose 1.5% or 3.5p to 237p in early trading this morning.
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