Diamond faces grilling over pay and bonuses

BOB Diamond, who took over as chief executive of Barclays on New Year's Day, will face tough questions over pay and bonuses when he appears before MPs on Tuesday.

Diamond, who could potentially earn up to 11.4 million a year in his new role, is next to be grilled by the cross-party Treasury Select Committee as part of its hearing into competition and choice in British banking.

Pay is also expected to be on the agenda, given the impending round of bank bonuses and with talks ongoing between the government and industry.

It is thought Barclays may try to placate policymakers by paying less than the 5 billion to 6bn in total remuneration that its results from the first nine months of last year suggest are due to its investment bankers.

Diamond has amassed one of the biggest banking fortunes in the world. He has been with Barclays for 14 years and as president of Barclays Capital has built the investment banking arm into a business that generates more than 80 per cent of the bank's total profits.

Having taken over from previous chief John Varley - a move brought forward by three months - the 59-year-old is being paid a 1.35m annual salary, up from his former 250,000, and stands to receive potential bonuses worth another 10m. His appearance in front of the Treasury committee follows hearings with outgoing Lloyds Banking Group boss Eric Daniels and Stephen Hester at Royal Bank of Scotland. The inquiry is running parallel to the investigation into banking competition being led by the Independent Commission on Banking.