Essential questions Barclays must answer on CEO Bob Diamond’s pay
Barclays is currently in talks with its shareholders over Bob Diamonds pay to prevent a revolt at the AGM on Friday
With Bob Diamond’s pay set to be worth anything from £6.3m to £27m, depending on the way it is calculated, the independent High Pay Centre is calling on Barclays to answer some key questions at its AGM.
Deborah Hargreaves, Director of the High Pay Centre said: “Barclays’ remuneration disclosure is confusing and opaque at best which is why there have been so many figures bandied around for what Mr Diamond actually received. Barclays needs to be straight with its shareholders about what it is paying and why.”
Key questions that need answering:
Does Barclays believe that Mr Diamond’s bonus is justified?
• Mr Diamond received a bonus worth £2.7m on top of his salary of £1.35m as profits fell 3% to £5.88bn.
Is the current split between investors’ dividends and bankers’ bonuses the right one?
• The bank is paying a dividend of 6p to shareholders for last year. This amounts to £700m in dividends to its shareholders last year, but this is dwarfed by the £2.1bn in staff bonuses.
How do we calculate a single figure for Bob Diamond’s total pay package?
• Business Secretary Vince Cable wants all companies to publish a single accurate figure for the total pay received by the CEO in any one year. With figures for Mr Diamond’s pay package ranging from £6.3m to £27m how would Barclays suggest the total package be calculated?
Shareholders are particularly concerned about the controversial “tax equalisation” payment of £5.75 million made by the bank on Mr Diamond’s behalf.
Deborah Hargreaves says: “This sort of tax arrangement is highly controversial particularly given the size. Barclays needs to be clear to the public and to shareholders the reasons for this payment”
Key questions on Bob Diamond’s tax equalisation benefit:
• Why did Barclays not highlight Mr Diamond’s tax arrangements to shareholders before the remuneration report was published?
• Tax equalisation is not uncommon for top employees who are seconded abroad temporarily. But was Bob Diamond posted in the US on a temporary basis?
• How long will Barclays continue to pay tax for him now that he is back?
• Was his tax position discussed when he was appointed as chief executive?
• Barclays appears to be paying income tax and national insurance on an original £2.5m tax liability which is classed as a benefit. Does Barclays think this is a price worth paying?
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