Barclays Bonuses: The Strange Silence is broken.
Up until last week there seemed to be little or no reaction to the £17 million package pay package of Bob Diamond. Further there was very little comment on the “tax equalisation” payment to him of £5.7 million to cover his tax bill!
Now a number of big investors in Barclays , including Standard Life Aviva and Scottish Widows, have considered voting against the remuneration committee on April 27th. These investors only account for over 6% of the total share register. But their influence is greater than this figure suggests. There may well be a wider share holders revolt. Should the size of revolt rise to over 10% , then the bank might have reconsider its pay package.
The “tax equalisation” payment has caused particular anger. Barclays have argued that this payment should not be directly counted as remuneration. Further, it was argued that it was created to deal with Bob Diamond’s move from America to London. So, it is not remuneration; then what is it? It is a payment by the bank to Her Majesty’s Revenue and Customs to cover Mr Diamond’s income tax. So, what should it be called?
This is an intriguing problem, which Barclays has not answered so far. Also, it raises the question as to whether other large employers here or in America routinely pay their employees tax bill. All that is fairly clear is that one should not add these two figures together to get a total package of £22.7 million. Is this some evidence that the bank does recognise that £22 million is not justifiable, but £17 is?
I suppose that the “tax equalisation” monies could never be called, a payment of our employee’s tax liability?
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