Sir John Sunderland is sticking to his guns, saying Bob Diamond deserved his bonuses – despite his predecessor’s queasiness
The mystery is why Alison Carnwath, former chair of Barclays’ remuneration committee, waited so long to put it on the record. It has been long known that she disagreed with Barclays’ decision to award Bob Diamond, the then chief executive, a £2.7m bonus for 2011. But she didn’t mention her disagreement with the other directors when resigning from the board last July. She merely cited her regret that she was no longer able to devote “sufficient time” to her non-executive duties.
OK, the notion of collective responsibility runs deep among the director class. But, come on. Carnwath, supposedly a boardroom toughie, was being too kind to her former colleagues. Barclays shareholders – who, don’t forget, were paying her £158,000 a year for a part-time job – would have welcomed hearing at the time her refreshing view that Diamond didn’t deserve a bean as a bonus in 2011. Instead, at the bank’s annual meeting last year, she blustered defensively that her pay committee believed “in good faith that we got our decisions and judgments broadly right”. Instead of putting her name to that, she should have resigned out of principle much earlier.
Still, Carnwath’s belated frankness is welcome. She was “amazed” by then chairman Marcus Agius’s proposal for Diamond’s bumper bonus. Her argument was spot on: the bank’s returns to shareholders were lousy and Diamond should have set an example by demonstrating that Barclays’ pay practices had to change. And, given that the board would have known at the time that trouble was brewing on the PPI and Libor fronts, her view has been vindicated by events separate from Barclays’ sub par financial returns for 2011. Everybody, surely, sees that now.
Well, not everybody. Sir John Sunderland, a member of Carnwath’s pay committee and now her successor as its chair, is sticking to his old views. Yes, Barclays’ returns were poor in 2011, he admitted, but there were “exogenous factors”. It was important that Diamond’s “enthusiasm, skill and ability” be recognised beyond his £1.35m salary. With the benefit of hindsight, he might now debate “the quantum” of the £2.7m bonus but, no, he did not feel a profound mistake had been made.
The question has to be asked: is Sunderland, who has been on the board since 2005, the right man to chair Barclays’ pay committee in the bank’s new socially responsible era? It’s only fair to judge him by results. But, on this evidence, he does not inspire confidence. We’ve moved on from “exogenous factors”, Sir John.