Published January 30, 2013
LONDON – The former head of remuneration at Barclays said she clashed with the UK bank's board over the annual bonus of former boss Bob Diamond, and described the bonus culture in banking as "obscene".
Alison Carnwath, who quit in July at a time of turmoil for the bank following its fine for rigging Libor interest rates, said Diamond had been reluctant to accept that pay at Barclays was high and was "overly protective of his investment banking franchise".
Carnwath, who cited personal reasons for her departure, said on Wednesday she thought Diamond shouldn't have got a bonus for 2011 because the bank's returns were weak.
"It was for this reason that I disagreed with the board Chairman's recommendation on Mr Diamond's annual bonus for 2011. I recommended zero.
"I was alone in my view both on the committee which I chaired and on the board," she said in a written submission prior to appearing before UK lawmakers.
She said Marcus Agius, then chairman, would be in a better position to explain how the bonus award had been reached.
Diamond was paid 6.3 million pounds for 2011, including a deferred share bonus of 2.7 million pounds and a long-term incentive award of 2.25 million.
Carnwath joined the Barclays board in August 2010 and built a reputation for being an uncompromising boardroom presence.
"A culture of entitlement has emerged in banking for a variety of reasons ... this has resulted in the fear of losing good people, obscene levels of award in a minority of cases and excessive reward in many cases for the investment banking community and particularly those in the front office," she said.
Diamond and Agius quit after the Libor scandal erupted in June. Carnwath was criticized for allowing the final pay awards to them, but she denied at the time that there had been any tensions between her and Agius despite reports they had clashed.
"Barclays were demanding too much patience from their shareholders and were insufficiently sensitive to the political and economic environment and the hostile attitude to banks generally," Carnwath said.
(Reporting by Steve Slater and Matt Scuffham; Editing by Erica Billingham)