Bob Diamond set for £2m bonus as Barclays report £6bn profit

Monday, 06 February 2012 08:28

Barclays are set to announce profits of close to £6 billion this week fuelling speculation that its chief executive Bob Diamond will receive a bonus in the region of £2 million.

The bonus payment will take Mr Diamond's total remuneration to nearly £11 million for the year. However, the bank will counter any criticism of its bonus payments by saying that the bank has beaten Project Merlin lending targets.

When Barclays announces its results it will also reveal that it has lent 13-14 per cent more to businessess than the targets set out under the Project Merlin agreement. It is not known if Barclays will announce senior executives bonus payments at the same time as it announces its results on Friday.

Barclays is set to pay its investment bankers around £1.5 billion, three times the bonus pot that the Royal Bank of Scotland (RBS) set for its bonuses this year, but 30 per cent less than the bonus pot Barclays settled on last year.

Barclays will become the first of the big banks to report its results but Goldman Sachs is also expected to pay its head of UK operations, Mike Sherwood around $10 million despite Goldman Sachs being likely to report a 44 per cent drop in annual profits

Barclays has made decent profits this year, which RBS did not. Barclays did not require a bailout by the UK taxpayer during the financial crisis in 2008, unlike RBS, 83 per cent owned by the UK taxpayer and Lloyds, 41 per cent owned by the UK taxpayer, which are still struggling to make profits.

However, Barclays has benefitted from an implicit guarantee that it would be saved by the taxpayer if it got into trouble. Ministers have urged all bankers to pay a lower set of bonuses this year as public sentiment hardens on the issue as most UK households have seen their levels of disposable income drop as high inflation and low wage settlements have combined to put the squeeze on middle England.

Barclays chief executive, Bob Diamond said in a famous quote in January 2011 as last years’ banker bonus season got underway that “the time for remorse is over” and that banks should be left to take risks and make profits.

However, the public and as a consequence, the politicians have ensured that this is not the case and the issue of banker bonuses is more toxic than it has ever been, as seen by the reaction to Stephen Hester’s proposed bonus from RBS that he was forced to give up.

Barclays Capital, Barclays investment bank division has been successful over the past few years and is one of the few investment banks that has not cut thousands of staff.

However, investors believe that it takes more risks than some of its rivals which mean its shares trade on a lower rating than many of its peers.

Barclays is expected to pay its 24,000 staff and average of £210,000 which includes benefits, pension contributions and deferred bonuses.

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