THE SIZE of Bob Diamond's pay-off is the subject of considerable speculation after Labour MP Tom Watson asking on Twitter, within minutes of the Barclays chief executive's resignation this morning, 'First question: what's the pay-off?'
One of the first to come up with a figure was Kamal Ahmed, The Sunday Telegraph's business editor, who tweeted that the corporate governance support service Manifest estimated that the severance package would be as much as £17m. This figure is marginally below Diamond's earnings from Barclays last year of £18m.
The Daily Mail's This is Money website went higher, estimating £20m-plus, which would include one year's basic salary (£1.35m), capital contingent awards (£2.3m), and the value of 13.2m bank shares that Diamond has collected during 15 years working for Barclays, which have a current value of £22.9m.
However, John Mann MP, the bullish Labour MP who sits on the Treasury Select Committee, suggested that Diamond's pay-off should be the princely sum of zero pounds.
To back up his argument, Mann quoted from a source who has a forthright opinion about what the bank's remuneration policy should be in the case of failure - Bob Diamond himself.
While being questioned by the committee in January 2011 about banks and bonuses, Diamond engaged in the following exchange with chairman Andrew Tyrie.
"If any banking institution got into trouble, the ultimate place that you look at first is the chief executive and at the risk management of the institution," Diamond said. "That's been the case when we've seen banks fall here in the UK or around the world."
Tyrie: "How would you lose out?"
Diamond: "I would assume that I would lose out by both losing my job and losing my shares in the company."
Tyrie: "This would be under the clawback agreement that you've signed that's in the company accounts?"
Diamond: "Yes, I think that's how the compensation programmes work."
As This is Money notes, the shares given to Diamond "were issued in previous years and cannot be vested for an agreed period, with the potential for awards to be clawed back in the event conditions are not met".
Whether Barclays feel it is appropriate for Diamond to keep these shares in light of the problems now engulfing the bank could depend on public pressure and also Diamond's potentially explosive evidence to the Commons Treasury Select Committee tomorrow.
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In a sign that Barclays will be mindful of public opinion, Sky's Mark Kleinman reports that the head of the bank's remuneration committee, Alison Carnwarth, has said that she will fight "tooth and nail" to keep Diamond's pay-off to a contractual minimum.
But Carnwarth may not even be called into action if Diamond is a man of his word. "I shall certainly ensure [that his words] are quoted back to him tomorrow," MP John Mann told the BBC. "He can then stick by [them] and not accept some huge pay-off." ·