Cable adds to pressure against Diamond's £17m 'outrage'

Bob Diamond's payout is thought to be up to £17 million
Bob Diamond's payout is thought to be up to £17 million
Alex Stevenson By

Westminster has added its weight to pressure on senior Barclays executives to resist Bob Diamond's £17 million 'golden parachute'.

Business secretary Vince Cable said he viewed the potential payoff as an "outrage" which shareholders should fight against in an interview on BBC1's The Andrew Marr Show.

Shadow chancellor Ed Balls, appearing on the same programme, said people would view the potentially £17 million payout for the former Barclays chief executive, who resigned last Tuesday over the Libor scandal, as "totally outrageous".

Diamond denied any personal culpability for manipulations of the interbank lending rate during his appearance before the Commons' Treasury committee last Wednesday.

He resigned from his post after it was fined £290 million for changes to the Libor rate. The Serious Fraud Office is now investigating the alleged wrongdoing.

Cable said that he hoped the board of Barclays would take a "very strict view" on Diamond's payout.

Balls went further, saying that ordinary people would be appalled at the "off-the-scale" package set to be received by Diamond. He called for ministers to "take a look at this" and talk to shareholders about the situation.

"There isn't anything government can directly do about it," Cable added.

"But in view of the shame which has already been heaped on Barclays bank I'd be very surprised if the chairman and the board were to allow another outrage to occur."

Barclays appears to be very much aware of the potentially damaging impact of Diamond's £17 million pay-off.

It will be keen to avoid a repeat of the public fury seen in 2009 over the pay-off and pension of Fred Goodwin, the former chief executive of RBS.

But legal difficulties which entitled Goodwin to keep the bulk of his pension, which media reports suggest could easily be repeated in Diamond's case, dragged the story on for months. He was eventually stripped of his knighthood in 2012.

Cable said the government introduced legislation to parliament two weeks ago addressing executive pay as a whole.

"In future, their golden parachute packages will have to be voted on in advance by their shareholders," he explained.

The proposals, including in the enterprise and regulatory reform bill, will require a majority of shareholders to approve pay policy and exit payments before they are approved in a vote taking place at least once every three years.

If the company's pay policy changes the vote must occur annually. Better information on how directors' pay compares to the workforce is also included in the legislation.

The reforms are not expected to be enacted before October 2013.


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