Barclays Diamond set to receive £9.5 million in bonuses

RBS - Ready for Fresh Controversy

RBS – Ready for Fresh Controversy

In a move that can restart the debate over banker’s bonuses, Barclays is set to award its chief executive Bob Diamond, a hefty sum of £9.5 million in bonuses.

Earlier Mr. Diamond had kicked up a storm in the lead-up to the financial crisis when he had pocketed annual packages totaling £27 million, thus creating a public outrage.

“At a time when many public sector workers are receiving their redundancy notices because of austerity measures taken as a result of the debts caused by the financial crisis, any award of this size will arouse anger among those now paying the price”, said Chuka Umunna, a Labour MP and member of the Treasury Select Committee to Financial Times.

Mr. Diamond had created a flutter last month when he told a parliamentary committee that the time for “remorse and apology” was over and refused to disclose if he will accept his 2010 bonus.

Mr. Diamond – like his peers in the industry, Stephen Hester of RBS and Eric Daniels of Lloyds Banking Group, had foregone their 2009 bonuses to avoid public outrage.

However, Barclays officials claimed that no final decision has been taken yet. People aware of the developments said that the final amount can vary between £8 million and £9.5 million.

Most European banks are yet to announce their year-end results.

The Barclays move is sure to undermine the industry’s recent move to repair relations with the government. The banking industry has undertaken the ‘Project Merlin’, under which they propose to hike lending to the small businesses and cut employee bonuses.

“Barclays are shaking hands with the government over Project Merlin while holding up two fingers to the country with the other”, said the spokesman for Lib Dem treasury, Lord Oakeshott.

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