Barclay’s exec gets £21m despite low profits

Barclay’s head of investment banking received £21 million last year, despite the bank’s profits remaining flat in 2007 following losses from the subprime crisis.

Bob Diamond received pay and shares worth over £21 million and is set to receive an additional £14.8 million from a three-year performance plan.

The sum is down slightly from the £22 million he received last year.

Mr Diamond’s pay was revealed in the company’s annual report and includes his £250,000 base salary, £6.5 million cash bonus, a £11.3 million share award held in a trust for three years and £3 million of shares which will be received in three years provided performance criteria are achieved.

Shares represent 64 per cent of the 2007 award, which is far higher than chief executive John Varley’s 2007 pay. Mr Varley will receive up to 4.2 million for the year.

Barclays’ 2007 pre-tax profit was down one per cent on the year at £7 billion, after facing a £1.6 billion hit on subprime turmoil.

Mr Diamond now plans to move to New York, to expand Barclays Capital in the US.

Stephen Mansbridge, managing director of AGM Transitions, which negotiates executives’ salaries, explained the high bonus was necessary to pay for top talent.

He told BBC Radio 5 Live’s Wake Up To Money: “It is also a contentious issue as to how top people are paid and there are plenty of examples in the past where shareholders have revolted against pay offers that have been made.

“In this case they haven’t at Barclays and what they are saying as shareholders, many of whom are institutional shareholders, is quite simply that they are expecting their top talent to produce and deliver and historically it has.”

Mr Mansbridge added: “The point for the public to understand is whilst these pay deals look excessive, they are all retrospective and they are all effectively remunerating somebody.

“Don’t forget Bob Diamond’s base pay is £250,000 so all the rest of it is a combination of cash and shares which are purely related to how he has performed in the previous year.”