Bloomberg News

Cameron Urges Barclays Against ‘Vast Pay-Off’ for Diamond

July 04, 2012

U.K. Prime Minister David Cameron said Barclays Plc (BARC) and other banks shouldn’t give golden parachutes to employees such as Chief Executive Officer Robert Diamond who leave their jobs as a result of the scandal over rigging interest rates.

“It would be completely wrong if people leaving under these circumstances were given some vast pay-off,” Cameron told lawmakers during his weekly questions session in London today. “It would be completely inexplicable to the public. I hope that won’t happen.”

Diamond, 60, resigned yesterday under pressure from policy makers and investors after the bank was fined a record 290 million pounds ($453 million) last week for rigging the London interbank offered rate as well as Euribor, its equivalent in euros, starting as early as 2005.

While Barclays says it’s yet to set Diamond’s severance package, he may be entitled to a payoff of between 2 million pounds and 21 million pounds, according to Manifest Information Services Ltd., a proxy voting firm that advises clients managing 3 trillion pounds of assets.

‘Illegal Activity’

He has received at least 120 million pounds in salary, bonuses and share awards since joining the board of Barclays in 2005, Manifest said. That excludes the 26.8 million pounds he made from selling shares in Barclays Global Investors in 2009.

Cameron had earlier said bankers engaged in “spivvy and probably illegal activity” should be punished. A “spiv” is British slang for a hustler.

“People want to know the crime in our banks will be punished like crime in our streets,” he said, adding it was “outrageous” that customers might have paid more as a result of interest-rate manipulation.

Deputy Prime Minister Nick Clegg said today there would be concern if Diamond received a large severance package.

“I don’t think he’s going to be short of a bob or two,” Clegg said on Sky News television. “I think many people will be dismayed that he might be paid handsomely, he’ll get handsome rewards for having presided over serious wrongdoing.”

Diamond will face questions from lawmakers at a Treasury Select Committee hearing today on how the bank failed to prevent the abuse of a benchmark used to set interest payments on $500 trillion of securities from mortgages to swaps.

To contact the reporters on this story: Eddie Buckle in London at ebuckle@bloomberg.net; Robert Hutton in London at rhutton1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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