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Bob Diamond to be new Barclays chief | Bob Diamond to be new Barclays chief |
(about 4 hours later) | |
One of the world's highest paid bankers, Bob Diamond, is to become chief executive of Barclays. | One of the world's highest paid bankers, Bob Diamond, is to become chief executive of Barclays. |
The American, who has made about £100m as head of the bank's investment arm Barclays Capital, will replace the current chief executive John Varley next year. | The American, who has made about £100m as head of the bank's investment arm Barclays Capital, will replace the current chief executive John Varley next year. |
Mr Varley was credited with steering Barclays through the financial crisis. | Mr Varley was credited with steering Barclays through the financial crisis. |
Meanwhile, HSBC chairman Stephen Green is also moving on to become a government trade minister. | Meanwhile, HSBC chairman Stephen Green is also moving on to become a government trade minister. |
Mr Green will take up the position of minister for trade and industry from January, ending his 28-year career at HSBC, having spent three years as chief executive and four years as chairman. | Mr Green will take up the position of minister for trade and industry from January, ending his 28-year career at HSBC, having spent three years as chief executive and four years as chairman. |
The move was in response to a request from the prime minister, HSBC said. | The move was in response to a request from the prime minister, HSBC said. |
BBC business editor Robert Peston said Mr Green's appointment by the coalition government "will doubtless be heralded as a coup by the prime minister" even though the record of business people in government has been "patchy". | BBC business editor Robert Peston said Mr Green's appointment by the coalition government "will doubtless be heralded as a coup by the prime minister" even though the record of business people in government has been "patchy". |
Meanwhile Bob Diamond's appointment as Barclays' new boss will reinforce a view that Barclays sees its future as a global investment bank, he said. | Meanwhile Bob Diamond's appointment as Barclays' new boss will reinforce a view that Barclays sees its future as a global investment bank, he said. |
Pay rise | Pay rise |
Marcus Agius, Barclays chairman, called Mr Diamond "superbly qualified", with "a proven track record as a business leader". | Marcus Agius, Barclays chairman, called Mr Diamond "superbly qualified", with "a proven track record as a business leader". |
"I am honoured by the board's confidence in me and greatly motivated by the challenge of leading Barclays during the critical period ahead," Mr Diamond said. | "I am honoured by the board's confidence in me and greatly motivated by the challenge of leading Barclays during the critical period ahead," Mr Diamond said. |
"As a leading global universal bank, Barclays has the right model, the right strategy and above all the right people to deliver for all our stakeholders." | "As a leading global universal bank, Barclays has the right model, the right strategy and above all the right people to deliver for all our stakeholders." |
His promotion means that Mr Diamond can expect to earn up to £11.5m a year - although some of this will come as part of long-term incentives and will not be paid immediately. | His promotion means that Mr Diamond can expect to earn up to £11.5m a year - although some of this will come as part of long-term incentives and will not be paid immediately. |
His base salary will be £1.35m, Barclays said, with the rest awarded in bonuses. | His base salary will be £1.35m, Barclays said, with the rest awarded in bonuses. |
"The compensation arrangements have been benchmarked against a peer group of global universal banks, industrial companies and financial services institutions," the bank said. | "The compensation arrangements have been benchmarked against a peer group of global universal banks, industrial companies and financial services institutions," the bank said. |
But Robert Peston warned that the rewards may be controversial. | But Robert Peston warned that the rewards may be controversial. |
"At a time when the economy remains weak, this package is likely to spark widespread criticism," he said, though he added that the choice of Mr Diamond was no surprise. | "At a time when the economy remains weak, this package is likely to spark widespread criticism," he said, though he added that the choice of Mr Diamond was no surprise. |
"Even Mr Diamond's most jealous rivals would concede that he has done an impressive job in building up Barclays Capital; and that it's the growth at Barcap which has turned Barclays into a leading global financial institution." | |
Investors appeared unimpressed by the news, however, with Barclays shares falling more than 3% in morning trading on Tuesday. | Investors appeared unimpressed by the news, however, with Barclays shares falling more than 3% in morning trading on Tuesday. |
HSBC shake-up | HSBC shake-up |
Barclays reported profits of £3.95bn for the first half of 2010, with the vast majority coming from Barclays Capital. | Barclays reported profits of £3.95bn for the first half of 2010, with the vast majority coming from Barclays Capital. |
BarCap will now be run by Barclays executives Jerry del Missier and Rich Ricci, who will become its co-chief executives. | BarCap will now be run by Barclays executives Jerry del Missier and Rich Ricci, who will become its co-chief executives. |
While formally announcing Stephen Green's departure, HSBC did not name his replacement as chairman. | While formally announcing Stephen Green's departure, HSBC did not name his replacement as chairman. |
Mr Green follows two other former business leaders, Mervyn Davies and Sir Digby Jones, into the business department. | Mr Green follows two other former business leaders, Mervyn Davies and Sir Digby Jones, into the business department. |
The relationship between Mr Green and Business Secretary Vince Cable will be closely watched, however, as they appear to disagree on proposals to break up big banks. | The relationship between Mr Green and Business Secretary Vince Cable will be closely watched, however, as they appear to disagree on proposals to break up big banks. |
Mr Cable chairs the banking commission currently looking at how to divide banks into their retail and investment banking operations. | Mr Cable chairs the banking commission currently looking at how to divide banks into their retail and investment banking operations. |
Mr Green, as head of one of the world's biggest banks, has expressed concern over such moves. | Mr Green, as head of one of the world's biggest banks, has expressed concern over such moves. |