Barclays boss offers concession over £2.7m annual bonus

Ahead of next week’s annual meeting, Mr Diamond and group finance director Chris Lucas have agreed not to receive half of their all-shares bonus award for 2011 if certain performance targets are not met within three years.

The concession comes amid mounting shareholder fury over a £5.7m tax payment made on Mr Diamond’s behalf and growing concerns over his bumper pay deal.

But the move, which threatens to dock Mr Diamond’s overall pay for last year by £1.35m, does not address previously-awarded long-term incentives which push up his total pay package to some £17.7m.

Barclays said it had been in talks with major shareholders since the remuneration report was published on March 9. The banking giant said Mr Diamond and Mr Lucas “volunteered” to subject their bonuses to new conditions in recognition of the “strength of opinion expressed by some shareholders”.

The executives agreed that 50 per cent of their deferred bonus awards, £2.7m for Mr Diamond and £1.8m for Mr Lucas, will not pay out until Barclays’ return on equity exceeds its cost of equity. The return on equity was 6.6 per cent in 2011, while cost of equity was 11.5 per cent.

Barclays said if that condition is not met, the potential payout will be subject to lapse if not met within three years from the date of the award.

The shareholder rebellion gathered pace earlier this month after leading investor group Pensions & Investment Research Consultants said Mr Diamond should not receive “any bonus at all”.