Call for Barclays directors to pay back bonuses awarded to them since 2005

Published on 30/06/2012 01:52

BONUSES paid to Barclays chief executive Bob Diamond and other top directors since 2005 should be clawed back, a major shareholder group said yesterday.

The Local Authority Pension Fund Forum (LAPFF), whose members have combined assets of more than £100 billion, also called on the company to pursue criminal charges against staff and executives at the bank.

The news came as Royal Bank of Scotland chief executive Stephen Hester revealed he is to waive his bonus this year, after the computer systems failure that caused disruption to millions of customers.

The forum was responding to the Barclays rate-rigging scandal which has lead to the bank being fined £290 million by the Financial Services Authority and the US’s Securities and Exchange Commission.

It called for all bonuses paid since 2005, when the interest rate manipulation first started, to be returned. It also claimed the role of chairman Marcus Agius “may no longer be tenable” due to his other role as chairman of the British Bankers Association (BBA) which sets the London Interbank Borrowing Rate – the very thing that Barclays manipulated. The forum’s chairman, Ian Greenwood, said: “The use of tactics to manipulate interest rates to create a favourable trading environment and pad the company’s profits is inexcusable.”

A statement issued by the forum said: “As the individual in charge of BarCAP, it is LAPFF’s view that either Mr Diamond was aware of what was going on, in which case he is culpably responsible, or he did not know, in which case he was culpably responsible for poor supervision, inadequate compliance systems and a deficient culture.”

It added: “If Mr Diamond does not return his bonuses voluntarily, then the board should… take legal proceedings. The board should not shy away from examining the case for criminal prosecutions.”

Meanwhile, Mr Hester said he would not take his bonus, estimated at £2.4m, which comes on top of his £1.2m salary. “I think it’s inappropriate for me to have a bonus this year,” Mr Hester said. “We have let our customers down. That may have arisen from old systems and things that were before my time, but I think we could reasonably be expected to have improved things since then and, clearly, we didn’t improve them enough, so it wouldn’t cross my mind to have a bonus this year.”

In a letter to the Commons’ Treasury select committee, he said he was determined to “personally lead the process” of regaining the trust of customer.