Bob Diamond will receive a £2 million payoff following his resignation as Barclays’ chief executive, but has given up bonuses worth up to £20 million amid a growing furore over the bank’s rate-rigging scandal.
The payment is the equivalent of a year’s salary plus pension contributions and is about twice Diamond’s contractual entitlement based on a six-month notice period. His salary was set at about £1.35 million per annum, although last year he was paid close to £25 million and has earned a total of around £120 million since joining Barclays’ board of directors in 2005. Last week, the Prime Minister, David Cameron, said that it would be “completely wrong” and “inexplicable” if Diamond received a large pay-off, and the topic has been a matter of intense speculation since he announced he was leaving just over a week ago. Barclays’ executive chairman, Marcus Agius, who also resigned over the scandal because he felt “ultimately responsible for the reputation of the bank”, was questioned about the situation by MPs today. He said that Diamond had given up his bonus voluntarily and had quit when “it became clear he had lost the support of the regulators”. They had imposed a fine of £290 million on the bank when it became clear that some of its traders had been fixing Libor submissions – the rates at which they lend to each other which, in turn, act as the basis for millions of daily financial transactions. But MPs also suggested that Diamond may have misled Parliament after denying last week that he knew the Financial Services Authority was concerned about the standards and behaviour of Barclays’ top managers. According to the Financial Times, the Treasury Select Committee heard that Lord Turner, the FSA’s chair, had sent a letter warning Agius that the bank had practised an “aggressive” interpretation of the rules and “unhelpful” spin. Andrew Tyrie, the Select Committee’s chair, also accused him of failing to control Barclays aggressive culture either before or during Diamond’s tenure.