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| Barclays chief Bob Diamond links part of bonus to improved performance | Barclays chief Bob Diamond links part of bonus to improved performance |
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| Barclays chief executive Bob Diamond is attempting to head off a damaging shareholder rebellion over his £17m pay package by pledging to link part of his bonus to an improvement in the bank's performance. | Barclays chief executive Bob Diamond is attempting to head off a damaging shareholder rebellion over his £17m pay package by pledging to link part of his bonus to an improvement in the bank's performance. |
| In an unscheduled announcement to the stock market, demonstrating the level of concern about the scale of the potential shareholder revolt at the annual meeting next week, the bank reiterated its determination to reach a return-on-equity target of 13% – well above the 6.6% reported for 2011. Diamond had described that figure as "unacceptable". | In an unscheduled announcement to the stock market, demonstrating the level of concern about the scale of the potential shareholder revolt at the annual meeting next week, the bank reiterated its determination to reach a return-on-equity target of 13% – well above the 6.6% reported for 2011. Diamond had described that figure as "unacceptable". |
| Along with finance director Chris Lucas, Diamond will have half of his £2.7m share award for 2011 linked to the return on equity in three years time. Only if the bank's return on equity is greater than its cost of equity (11.5%) will he take that half of the bonus. | Along with finance director Chris Lucas, Diamond will have half of his £2.7m share award for 2011 linked to the return on equity in three years time. Only if the bank's return on equity is greater than its cost of equity (11.5%) will he take that half of the bonus. |
| The bank stressed that it was "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 stressed that it was "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". |
| This appeared to be an attempt to address criticism by the Association of British Insurers that while the bank had claimed it was showing restraint on bonuses, the amount of revenues it had used to fund payouts in its investment bank, Barclays Capital, had remained static at 35%. | This appeared to be an attempt to address criticism by the Association of British Insurers that while the bank had claimed it was showing restraint on bonuses, the amount of revenues it had used to fund payouts in its investment bank, Barclays Capital, had remained static at 35%. |
| After detailed discussions with shareholders, who have been warning they would vote against the remuneration report at next Friday's annual meeting, chairman Marcus Agius is also making a commitment to bolster dividend payments. The statement made no reference to the £5.7m tax bill that the bank paid to cover Diamond's liability on returning from the US to take up the role of chief executive in January 2011. | |
| Evidence of the bank's concern about a potential rebellion emerged this week when it began urgent canvassing of major investors, asking them what could be done to limit the level of dissent. The changes announced to Diamond's pay deal on Thursday were "recognising the strength of opinion expressed by some shareholders, via those meetings, and the executive directors' confidence in the future performance of the bank". | |
| "Barclays remains firmly committed to delivering a 13% return on equity as soon as possible," the bank said. "Achieving this target of 13% return on equity will allow the portion of post-tax profits that are distributed as dividends to normalise at a level much higher than today, and Barclays intends to continue to make steady progress towards that as the return on equity improves. The combination of higher earnings and a higher dividend payout ratio will allow a significant increase in the absolute level of dividends received by shareholders". | "Barclays remains firmly committed to delivering a 13% return on equity as soon as possible," the bank said. "Achieving this target of 13% return on equity will allow the portion of post-tax profits that are distributed as dividends to normalise at a level much higher than today, and Barclays intends to continue to make steady progress towards that as the return on equity improves. The combination of higher earnings and a higher dividend payout ratio will allow a significant increase in the absolute level of dividends received by shareholders". |