One of the biggest business bank accounts in the UK has drawn ire for the payment of a possible £8 million to its new chief executive.
Barclays may soon be fanning the flames of the row over executive pay bonuses. New chief executive, Bob Diamond, is set to earn an approximate £8 million in bonus pay; meanwhile both austere economic conditions and public sector job cuts have become rampant in the UK.
The banking giant expressed the hope that only paying £8 million in bonuses would actually demonstrate how committed Barclays was to bonus pay restraint. Mr Diamond would normally have expected double that amount in his former capacity as a Barclays Capital investment banker. However to be fair, the Barclays executive has actually waived his bonus pay for the last two years.
Meanwhile Mr Diamond’s counterpart at nationalised bank RBS, Stephen Hester, may earn as much as £2.5 million in bonus pay for the past year.
MPs on the Treasury select committee have made indications that they will request Mr Diamond to decline any bonuses he may be offered for 2010. This comes in the wake of comments by David Cameron that effectively stated banks should not be micromanaged or made scapegoats by the government.
The prime minister stated that his true goal is to see banks becoming more socially responsible. This could be accomplished by awarding bonus pools that were smaller than the year previous and also increasing the number of business loans they make.
Senior members of the Liberal Democrats expressed dismay at the tenor of the remarks made by the prime minister. Many are still calling for an additional tax on banks to be considered if financial services providers neglect to show more restraint in their business practices.