We don’t yet know how much Bob Diamond was paid for running Barclays last year. We do know the bank will cap cash bonuses at £65,000 (about $100,000), joining a growing list of banks that have bowed to shareholder and public pressure to curb payouts.
Barclays could have reported Diamond’s compensation yesterday, but it decided to stick with the tradition of announcing it when the bank’s annual report is released next month. By waiting, Barclays missed a chance to underscore its commitment to shareholder value, and it left Diamond himself in the awkward position of deflecting questions about his pay.
Now Barclays is sure to face another media swarm in a few weeks when it announces Diamond’s compensation. It won’t be fun for him or the bank. Because even if Diamond’s pay is cut, he won’t be hailed a hero (no banker would today), and the media will be sure to replay all the unpleasant issues – the bank’s weak performance, its unhappy shareholders and the public outcry over the industry’s bonus practices.
It won’t be surprising if Barclays looks back a month from now and realizes, too late, that it should have made both announcements on the same day. By doing so, it could have addressed all the issues at once, and given Diamond a chance to speak openly about risk, reward and retention. He hasn’t been shy about defending the need to “celebrate the rewards of success.”
In today’s world, every bank will take its turn getting slammed on bonuses. But they should take pains to avoid being slammed twice.