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Tuesday 25th of January 2011
January 24, 2011    

Bonus review underway at Barclays

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by Kay Murchie

According to a report by the Financial Times, Barclays chief executive, Bob Diamond, is looking to reform bonuses, in a move which will radically change the way it pays its senior bankers.

The report suggests the newly-appointed chief executive is considering paying a large amount of bonuses in special contingent convertible bonds (known as “cocos”) - that are effectively worthless if the bank runs into trouble.

While the banking giant said no decision had been made with regard to the bonus overhaul, it will reveal more details when it publishes its annual results next month.

The report comes at a time when bonuses continue to dominate the news. Earlier this month, Mr Diamond faced a grilling from MPs over his reported £8 million bonus.

The Treasury Select Committee, who questioned Mr Diamond, asked whether he would waive his bonus for a third year.

Mr Diamond responded: “I haven’t been offered a bonus, that’s a decision that will be taken by the remuneration committee in the next few weeks.”

Bonuses have been a major issue for some time now and have sparked public outrage since many argued that excessive bankers’ bonuses reward the risk-taking culture that led to the financial crisis.

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