Barclays boss ties 50% of bonus to future performance amid shareholder pressure over bank's pay policies
|
UPDATED:
15:35 GMT, 19 April 2012
Barclays said today its chief executive Bob Diamond and finance director Chris Lucas have agreed to link half of their bonus awards for 2011 to certain targets over the bank's future performance.
The move, which threatens to cut Diamond's overall pay for last year by 1.3million, comes amid growing shareholder concerns over bonuses and tax deals awarded to the bank’s boss.
Barclays, which is set for a stormy annual meeting on April 27, said the two executives ‘volunteered’ to subject their bonuses to new conditions in recognition of the ‘strength of opinion expressed by some shareholders’.
Barclays boss: Bob Diamond has agreed not to be paid 50 per cent of his bonus award for last year if certain targets are not met within three years
Diamond and Lucas agreed that 50 per
cent of their deferred bonus awards – 2.7million for Diamond and
1.8million for Lucas – will not pay out until the bank’s return on
equity exceeds its cost of equity. In 2011, the return on equity was 6.6
per cent, while the cost of equity was 11.5 per cent.
If that condition is not met within
three years from the date of the award, the potential pay-out will be
subject to lapse, 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,’ the bank said.
The changes, however, do not address
Diamond’s previously-awarded long-term incentives, which push up his
total pay package to some 17.7 million.
Earlier this month, leading investor
group Pensions & Investment Research Consultants (Pirc) added its
voice to increasing shareholder opposition to
the bank's pay policies.
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 per cent of the share register, are expected to do the same.
Related posts:
- Barclays under pressure to slash chief executive Bob Diamond"s enormous bonus
- Mystery Barclays executive overtakes boss Bob Diamond as banks top earner
- Barclays boss Bob Diamond "could get 10m payout" in pending bonus round
- Barclays boss Bob Diamond faces 75% pay cut
- "Disbelief" as Barclays picks up 5.7m tax bill owed by boss Bob Diamond