By Steve Slater
LONDON, Sept 7 (Reuters) - After 14 years at Barclays building up its investment bank into a Wall Street power, BobDiamond will have no fear that the last American chief executiveat the bank lasted just a day in the job.
Six years after previously missing out on the top job,Robert E. Diamond -- universally known as Bob -- was on Tuesdaynamed as the British group's new chief executive.
He will take over from John Varley at the end of March,after a six-month handover period.
The affable and charismatic Diamond, who at 59 is five yearsolder than Varley, is one of Europe's best paid bankers and alightning rod for criticism in Britain of the industry's big payawards.
That was one reason why the Concord, Massachusetts-born sonof two teachers might be happy to have spent much of his time inthe last two years in New York instead of London.
The power base of Barclays Capital shifted to New York afterthe opportunistic takeover of the U.S. operations of LehmanBrothers two years ago. That transformed BarCap, giving it theequities and advisory firepower for Diamond's ambition to takeon Wall Street powerhouses such as Goldman Sachs.
But Diamond will return to London as chief executive, givingthe avid sports fan and former football linebacker moreopportunities to watch London soccer team Chelsea instead of hisbeloved Boston Red Sox, Celtics and New England Patriot teams.
He often draws parallels between sports and business, andsays he runs a meritocracy and rewards success, touring thedealing room and talking to the players.
LECTURER TO BANK BOSS
Returning to London will also put Diamond back in the lineof fire over his pay.
Diamond has not taken a bonus in the last two years, but waspaid 21 million pounds in 2007 and received 26 million poundslast year after the sale of asset management arm BGI and ownsBarclays shares worth 30 million pounds. Earlier this year thethen senior government minister Peter Mandelson branded him the"unacceptable face" of banking.
But Diamond remains an Anglophile. After sealing the Lehmandeal, he is reported to have played "God Save the Queen" overthe tannoy of the bank's trading floor.
He told reporters on Tuesday he was honoured to get the toppost. "The opportunity for anyone to be CEO of Barclays, withits 300 years of history, in the environment we work in today istremendously motivating and challenging."
The only other American to take the helm at Barclays wasMike O'Neill, a little known former U.S. Marine who was namedCEO in February 1999. O'Neill's lucrative pay packet wascriticised at the time but a health scare meant he only attendedthe office for one day to unravel his contract.
Diamond has been the public face of BarCap since joining in1996 and is credited with reviving it from the ashes of Barclaysde Zoete Wedd (BZW) soon after arriving.
He became an investment banker almost by accident, onlyentering banking after two years as a lecturer in business atthe University of Connecticut.
Both his parents were teachers and he retains close links toeducation through charities -- his Diamond Family Foundationsupports Colby college in Maine.
After being attracted to bond trading he joined MorganStanley and moved up the ranks during 13 years there. Fouryears followed at Credit Suisse First Boston (CSFB), which heleft to join Barclays in 1996, reportedly after a row over his1995 bonus, to become head of BZW's Global Markets Division at atime when BZW was struggling to compete as a full-serviceinvestment bank.
A year later Diamond took over at the top of BarclaysCapital, the renamed rump of BZW after the decision was taken todispose of its equities and mergers and acquisitions (M&A)departments and concentrate instead on building up its debtmarkets and foreign exchange business.
Initially Diamond joined BZW on a two-year contract said tobe worth at least 5 million pounds ($8 million) plus perks tomake him one of Barclays' highest paid executives andimmediately set about building a new team with the help of acheque book described at the time by one market commentator as"so large it had to be delivered via parcel post".
Twelve years later Barclays was sufficiently confident ofDiamond's capabilities to buy at a knock-down price the U.S.business of Lehman Brothers, returning the group to equities andM&A work.
That made BarCap a "top tier" investment bank, and Diamondtold Reuters on Tuesday group strategy will continue along thepath it is already on.
"You're going to see a more balanced group but a group thatis like the Barclays of today -- that's a very well respectedglobal universal bank. I think the biggest challenge is aroundexecution, not strategy," he said.
After missing out to Varley for the top job at Barclays in2003 he was linked with other top bank jobs but stayed with theBritish bank despite persistent media speculation that he didnot get on with Varley.
"We have a great relationship and I'm wondering what youguys are going to do after April when you can no longer ask howJohn and Bob are getting along," Diamond said.