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Barclays: Executives enriched, shareholders impoverished

Robert Peston | 15:23 UK time, Monday, 7 March 2011

Barclays remuneration report discloses that £100 invested in Barclays on 31 December 2005 would have been worth £53 - including dividends received - at the end of 2010, which most would describe as a hopeless performance.

Barclays cycle hire bikes

And, lest you labour under the illusion that this was just what happened to the stock market in general, think again: the same £100 invested in all FTSE100 companies (a tiny bit of each company) would have increased in value to £126 over the same time period.

Or to tell you what you already know, returns on almost all our banks - including Barclays - have been lamentable.

So how is it that the chaps at the top of Barclays, and those immediately below them, earn such astonishing sums of money (see my earlier post for the details)?

Can Bob Diamond be worth the £9m he received in pay and bonuses and the £15.2m in shares he also received from earlier incentive schemes that have just matured (or vested, to use the jargon)?

Barclays would say Mr Diamond is simply being paid what's required to retain the services of an acknowledged star of his industry.

But if that's the market rate, isn't there something wrong with a market which also awarded £14.3m and £14m to a couple of executives below board level (and who knows what magnificent sums to traders without executive responsibility, whose pay isn't disclosed?)?

Or to put it another way, how can executives be worth quite so much when the owners of the business, the shareholders, have lost so much money?

Here is another way of looking at the extent to which the owners have been punished: in 2007 Barclays' investors received dividends of 24p per share; in 2010, dividends were 5.5p per share.

If a 77% cut in the dividend isn't redolent of management failure, what is - and why haven't the owners instructed Barclays and the other banks to allocate less wonga for top executives and more for shareholders?

Ministers would argue that the disparate fortunes of executives and owners stems from the ignorance of the owners about what has really been going on. So the Treasury told me it deserved credit for forcing Barclays and the other banks to disclose for the very first time the remuneration of the top five executives below board level (which was a stipulation of the Project Merlin agreement with the big banks on business lending and pay).

So now that shareholders know that the top five below board level earn £14.3m, £14m, £9m, £6.5m and £5.2m - or £49m in total - will they think that's miles too much, just about right or too little?

Will they bother to probe behind the headline figures to take a view about whether they are really paying these executives for performance?

Is there any chance that when it comes to bankers' pay, there will start to be some kind of proper alignment between the rewards to senior employees and the fundamental performance of the business - or will top bankers' pay continue to look as crazy to most people as the pay of Premier League footballers?

Comments

Page 1 of 3

  • Comment number 1.

    Whats the share price got to do with running the business?

    You have to pay the going rate for the best people?

    Were all in this together?

  • Comment number 2.

    Not to worry Mr Peston, it looks you and all the other people that cant see further than the end of their nose will have driven the banks out of the UK quite shortly

    Problem solved

    Once HSBC and Barclays have gone off off to Hong Kong with the further and maybe terminal erosion of our tax base who will be the next target of the left?

  • Comment number 3.

    A better comparison would be to see what returns investors in Barclays Capital products have delivered over that 5 year period. The high bonuses everyone is so keen to highlight don't relate to the business at large, but to a specific part of (presumably) Barclays Capital.

    So what Mr Peston is presumably suggesting is that bankers in Barclays Capital, who was delivered (relatively) good returns for their clients, should be punished for the downturn/general unprofitability of a division of their company that they have no control over?

  • Comment number 4.

    Exactly my comment on your earlier post.

    Presumably it's time for someone (i.e. a group of shareholders) to call their bluff. Banks argue they need to pay big to keep talent. I say, if that's the best this talent can do, let's try finding different (less expensive) talent. It would be a very big call for UKFI to be that someone, but also the easiest, unless we see an alliance of pension funds of similar.

  • Comment number 5.

    Shareholders could make changes to executive pay if they wanted to , they are just to lazy to take action . Pension funds are the worse, ultra lazy . Get a SIPP and vote with your feet....

  • Comment number 6.

    It's quite simple really: bankers have made it to the other side of Mr. Carroll's looking glass!

    "... how can executives be worth quite so much when the owners of the business, the shareholders, have lost so much money?"

    "Why, because it could have been so much WORSE of course!
    Do have another cake dear. More tea?"

  • Comment number 7.

    An aknowledged star of his industry? Carrying on the PL footballer analogy, is form temporary and class permanent? If you are only as good as your last game, then Mr. Diamond is woefully out of form, and has been for YEARS now. How can the owners not feel as though they are paying enormously over the odds? This is another example of banks selling the lie that 'talent' is essential and will leave for greener pastures. Let's not let morality and decency get in the way.

  • Comment number 8.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 9.

    Now I've heard it all. Peston concerned about shareholders.

  • Comment number 10.

    His bonus is the equivalent to the salary of 200 (yes two hundred.!) teachers assuming a teacher earns around £30K p.a.

    It can't be right this....surely he is worth at least 1000 teachers....after all in Wall Street, there are people whose bonuses far exceed even the equivalant of 10,000 teachers...I've even heard that one of the biggest bonuses in Wall Street far exceeded the equivalent to 100,000 teachers at least....
    Maybe we should have a bonus structure which gives teacher number equivalent...
    Then this would show how unfair our system is compared to that of Wall Street...

    It's just not fair that in Wall Street bonuses are far greater than The City...

    Something ought to be done about this...

    What do you think Mr. Cameron...you poor soul, as your teacher number equivalent is only about 10...Perhaps you get by only because of private income.?...Why don't you not get a job in the City....And this also applies to your jolly good friends...

    It's nae fair is it.??

  • Comment number 11.

    I notice some posters feel our hands are tied and that the 'left' (which doesn't exist anymore in this country) are chasing away the banks. I would draw attention to the standard of living and services in some Scandinavian countries who don't rely on the the immoral banking sector to generate the taxes to sustain their way of life. Countries such as the western european countries and the USA have the greatest financial inequality (the rich get richer...)and also the highest rates of obesity, teenage pregnancy etc. Would it not be more desirable to persue a better way than to pander to the banks and their talent? It makes me sick.

  • Comment number 12.

    "Once HSBC and Barclays have gone off off to Hong Kong with the further and maybe terminal erosion of our tax base who will be the next target of the left?"

    Openside - do you know how much corporation tax Barclays actually pay?
    Just over £100m at the most recent count. A negligible amount because they know how to 'avoid' paying taxes as, i'm sure, do most of their top staff. Personally i'd be very happy to see them go to HK at least they won't be ripping us off so much.

    They are not generating this money, it is coming from ordinary people paying over the odds for their pensions and other financial products

  • Comment number 13.

    I'm sure these bankers must be "stars" at something, if they can generate such unjustifiable salaries in the face of the erosion of shareholder value and wealth that they've initiated in pursuit of personal gain.

    But as Prof. Brian Cox might have said, they're more white dwarfs creating red giant deficits.

    Kick them out with no parachutes please.

  • Comment number 14.

    You are making the assumption that it is Barclays Capital which has caused the dismal share price performance rather than the traditional commercial bank which might have lost bucketloads on good old-fashioned corproate, commercial and property lending, which is where UK banks have made sucha mess in the past? One has only to look at Northern Rock to see that. On the point about banks leaving, ask the taxpayers of Frankfurt whether they would like to have a larger banking sector and they wil say yes; ask the same in Paris and they too will say yes. Oh, and Mortgaged_Mike, UKFI has NO stake in Barclays. the comparison with Prem League players is pathetic - the league pays its performers for appearing in what is the most watched in the world with viewing figures in the hundreds of millions - clearly meritocratic and clearly results oriented: less than half the clubs in it have been ever present for 19 years. one might question the £9bn spent for Olympic sports that together in the UK barely attract an audience equal to one Old Trafford in a full year.

  • Comment number 15.

    I would like to say that this is good, unbiased, balanced reporting , but I wouldn't be telling the truth in the slightest if I said that.

    All banks have been hit. RBS has been hit much more. So why focus on Barclays? Annoyed that they saved themselves (cue WOTW)?

    It is up to the shareholders to deciide, not journalists who have an axe they appear to want to grind.

  • Comment number 16.

    I do hope he gives some of it to charity. Perhaps he could take over support for the LSE?

  • Comment number 17.

    "Once HSBC and Barclays have gone off off to Hong Kong with the further and maybe terminal erosion of our tax base who will be the next target of the left?"

    As for banks being a "target of the left", I don't understand how any rational person could be supportive of Britain's major banks.

    They have taken the country for a ride, pressing hard on successive governments for reductions in regulation, then using our hard-earned to gamble on the world's futures markets. When it all went wrong, us tax payers (across the political spectrum) have had to pick up the pieces. No remorse has been shown, and nothing has been done to protect us against the same thing happening in future.

    Roosevelt had the foresight to increase regulation after the Wall St crash. Sadly, our current government is so much in the pocket of the City that they won't dare go down the same route.

  • Comment number 18.

    Robert, why are you continually bashing all the banks.

    Neither Barclays nor HSBC took taxpayers funding and therefore any remuneration levels are between the Board, the execs concerned and the shareholders only.

    More to the point, I still haven't seen your response to the recent question regarding your own level of remuneration which is funded by all licence payers.

  • Comment number 19.

    #12 says:
    "Openside - do you know how much corporation tax Barclays actually pay?
    Just over £100m at the most recent count. A negligible amount because they know how to 'avoid' paying taxes as, i'm sure, do most of their top staff. Personally i'd be very happy to see them go to HK at least they won't be ripping us off so much."

    Does this also apply to the hundreds of thousands of employees of the banking sector in London and GB as a whole?

    Engage brain before mouth (or keyboard in this case).

  • Comment number 20.

    When his wages are cnsidered alongside the likes of Wayne rooneys, Rio Ferdinand and much lesser sports stars such as Kolo toure, Yaya Toure Michael Dawson and many hundreds more...is his wage all that unreasonable? I would suggest not.

  • Comment number 21.

    I note the anger Robert but am not too worried about the shareholders. They are largely irrelevant. If you had a bit more sympathy for the customers, borrowers and savers, I could understand your passion.
    This is where the billions in bonuses is coming from and you should be asking the right questions of the politicians and the regulators.

    Me, I'd take away their license to lend in sterling and to take deposits.

  • Comment number 22.

    "10. At 16:17pm on 7th Mar 2011, coplani wrote:
    His bonus is the equivalent to the salary of 200 (yes two hundred.!) teachers assuming a teacher earns around £30K p.a.

    It can't be right this....surely he is worth at least 1000 teachers....after all in Wall Street, there are people whose bonuses far exceed even the equivalant of 10,000 teachers...I've even heard that one of the biggest bonuses in Wall Street far exceeded the equivalent to 100,000 teachers at least....

    "

    Is that right - someone got a bonus of 3 billion pounds in New York?

  • Comment number 23.

    2 blogs on exactly the same subject on the same day.. quality work from our business editor. What will the next shock Peston revelation be...

    RBS pays [insert name of person] a bonus ?
    Ladies on the Halifax advert get paid for being in it ?
    Some ex bankers no longer work in banking ? but lets name them anyhow..
    Bob Diamond, bonus, tax, dividends, shareholders, bail out, government - only arranged in a different order ?

  • Comment number 24.

    I feel that with so much popular focus being given to bank bonus payments we run the risk of focus being drawn away from the more important issue of "banking reform" and what governments' need to do to prevent the banking industry causing a future catestrophic collapse of the economy.

  • Comment number 25.

    I think that the banks will see a lot of changes over the next decade or so, the changes may take a long time but they will be made through the sheer force of economics.
    Left-wing posturing about bonuses does very little - shareholders receiving little for their investment does.

  • Comment number 26.

    @openside50

    Barclay's paid >£150Mn in corporation tax.

    I say let them go to Hong Kong. Two months ago I would have defended them but no longer. If they move group HQ to HK we will retain most of the NI and EMP.

    I just cannot tolerate the greed any longer.

  • Comment number 27.

    2. At 15:58pm on 7th Mar 2011, openside50 wrote:


    "Once HSBC and Barclays have gone off off to Hong Kong with the further and maybe terminal erosion of our tax base who will be the next target of the left?"

    Don't worry openside50 it's not going to happen. Why? why, because the first people out of the door would be the CEO's of HSBC and Barclays and all the other bankers who would be replaced by the Chinese.

    btw- Is it only the 'left' that think that the top bankers pay is crazy? RP seems to think that it's most people. Perhaps you are both correct and that most people are indeed lefties.

  • Comment number 28.

    @10. At 16:17pm on 7th Mar 2011, coplani wrote:

    Classic. Yes. Teacher equivalents = Teqs. I can see your argument. The world is so unfair. Especially for the wealthy. I mean imagine having to disclose to your peers as you swallow your Beluga caviar that you're only worth 100 Teqs, and their all giggling into their Roederer Cristal because they earn 1,000 Teqs. It's enough to make you .....just die.......Or worse......throw up on someone's party frock. And, of course, we mustn't forget that people are low paid and poor because they're lazy. Obviously teachers need to work harder to make up the difference. Or maybe they should get on their bikes and leave for places where the salaries are higher and the population appreciates their talents and grants them the status they deserve.


    @11. At 16:17pm on 7th Mar 2011, jm1980 wrote:

    Just because the 'left' don't exist anymore doesn't mean we shouldn't be vigilant. Remember the power cuts of the 70's. We don't want a return to that, do we? Isn't that the way divisive 'reasoning' goes? That's the next load of rubbish I'm expecting from our betters in a crude attempt to split opposition groups.

  • Comment number 29.

    voluntary Shareholders = greedy suckers
    Forced shareholder (Pensioners) = Confidence trick victims
    Bankers = greedy pigs with pork for brains (because people with brains would cool off on the bonuses until they know they won't need another bailout)

    I've seen on this blog how some people make 'investment decisions' - it makes me go cold with fear to think these people are actually putting money into the stock market.

    They don't understand it, they don't respect it and soon they're all going to get squeezed out of existence.

  • Comment number 30.

    Jeremy O, I wish it was true, but Barclays has benefited enormously from government action to prop up the banking system. Sadly until elected governments regain control of their currencies, we will continue to have obscene distortions to the economy with a few lucky people being paid obscene sums of money.

  • Comment number 31.

    2. At 15:58pm on 7th Mar 2011, openside50 wrote:

    "Not to worry Mr Peston, it looks you and all the other people that cant see further than the end of their nose will have driven the banks out of the UK quite shortly"

    Hurrah!

    "Once HSBC and Barclays have gone off off to Hong Kong with the further and maybe terminal erosion of our tax base who will be the next target of the left?"


    Well maybe as a new unemployed banker - you can sit around and consider the role of banks and how they can be easily replaced with a different form of resource allocation.
    .....or you can cry about the banks which have left taking your pointless existence with them!

    The CHOICE as they say....is yours...

  • Comment number 32.

    @ #3 DJR

    Ok, so I just had a wee check back.

    There's been a £2.60 drop per share since 2005. And a mighty £1.30 paid in dividends in the same period. So a loss of £1.30 per share in the same period as the bonuses.

    Wait, let me guess......the £1.30 per share is roughly the same value as has been paid in bonuses since 2005. Or am I just being passimistic? Time to recover some more proceeds of crime me thinks!

  • Comment number 33.

    I dont understand how what Barclays pays concerns you Robert, its a matter for Barclays shareholders, and not you a casual observer.

    The reason for the Barclays fall in share price was its shares were significantly over valued by the market in the past, in fact they are now undervalued, but this is because banks are busy increasing their capital to cope with the new rules enforced by the government.

    In all honesty Mr Diamond has done a pretty good job, and thus deserves what was set down for him in his contract.

    Maybe the next article we have can be about something a bit more relevant to the public?, not this pointless 'banker bashing', its tedious, especially because much of it seems to be bred by jealousy.

    It seems that almost all of these blogs focus on the financial sector, which means frankly they aren't educating us to other parts of the economy that matter more.

  • Comment number 34.

    @openside50: And exactly how much tax do the banks actually contribute? How does passing money around, and concentrating it in the hands of the few, generate wealth? How exactly do they help the country? At the moment I can only see a deficit they generated which we will be paying for for many years, whilst the bankers in question swan around with multi-million pound bonuses.

  • Comment number 35.

    4. At 16:02pm on 7th Mar 2011, Mortgaged_Mike wrote:

    "Presumably it's time for someone (i.e. a group of shareholders) to call their bluff. Banks argue they need to pay big to keep talent. I say, if that's the best this talent can do, let's try finding different (less expensive) talent. "

    I agree - if this was the best talent we could buy - then I can replace all bankers with a decent excel spreadsheet! - at least it won't lend based on the desire to profit rather than the cold calculation of risk (as the bankers did)

    ...and to think.....some of the 'free market' banking sympathisers say we shoudl do everything to make them stay.
    Not exactly free market is it - once again the fools are twisted up in their ideology of idiocy.

    Free market rules - well until it's MY job under the spotlight......free market rules - well until it's MY bank nearly going under - then I want a bailout.

    Capitalists and their argument eh? - getting worse and worse by the day...

  • Comment number 36.

    Why not have shareholders vote on directors' pay at the AGM? It could be like a Dutch auction, start at say £10m, go down by 10% in steps until there's a majority... that would make'em sweat.

  • Comment number 37.

    @ 2. At 15:58pm on 7th Mar 2011, openside50 wrote:

    > Once HSBC and Barclays have gone off off to Hong Kong with the
    > further and maybe terminal erosion of our tax base who will be the
    > next target of the left?

    Don't worry about any of that - with those gone, there'll be far more for the rest of us. We can't prop us those fat-cats any longer.

    As for the tax, we'll just pay less of it. The government wastes most of it anyway, so they'll have to waste a lot less!

  • Comment number 38.

    Makes you wonder if the banks PR departments have been waiting for this because they sure are coming out in force.

    Mr P you are coming under attack, PERHAPS a change of focus by the banks PR departments.

    More and more on here seem to be saying that they have changed banks – GREAT!

    We need others to follow their example of morals and democracy in action.

    Why should I care because I won the euro lottery on Friday ‘6.5’ I have not collected it yet (so me and uncle BOB have some thing in common) my lottery win only buys 2 loaves and some tea cakes! He’s winning the lottery every year and you Barclays customers are supplying the spondoolics!

    We must change the saying to:

    You can fool most of the people most of the time especially if you bank with ….

    And for those who remember this:

    If the salesman found that you had bought a Des O’Conner record then they can sell you anything, now it’s finding out who you bank with!

  • Comment number 39.

    25. At 16:49pm on 7th Mar 2011, Peter White wrote:

    "Left-wing posturing about bonuses does very little - shareholders receiving little for their investment does."

    Oh this is a classic - like the way Lloyds shareholders 'stuck it to 'em' when they were dropped in it by Varley???

    Do you have ANY IDEA who Barclays shareholders are? - You may think you're a big boy with your 100 shares, but Barclays couldn't give two hoots about you.

    Just like your Government doesn't care about your vote - all they need is enough to get in and plenty of rich lobbiests to pay for some adverts to keep the 'sucker count' high.

    There is nothing better than listening to those who think they have power and a say when in fact my cat has more say in the running of Barclays than small shareholders.

    Still - I shoudl have guessed by the phrase 'left wing posturing' that you have difficulty seeing anything other than in black and white, red or blue or even good bank, bad bank.

  • Comment number 40.

    #26

    There is no guarantee that we will lose only a small amount through them moving overseas, its likely we would lose the very significant amount of income tax that Barclays employees are paid, not to mention the skills they have.

    Its funny how 100million is not seen as a 'significant' amount of money by you, do you work in the public sector by any chance?, I hear they are rather keen on waste aswell.

    Its safe to assume the 500million we would lose yearly in the best case scenario would infact be significant to HMRC.

  • Comment number 41.

    To all those senior Barclays Capital bankers trying to justify why they are worth literally hundreds of times as much as the majority of Barclays employees:
    1. Can you truly prove that a lesser paid person would not have achieved the same performance for Barclays Capital. How many many have they tried?
    2. Should not the shareholders and the people who's money they are investing (the customers) who should be equally rewarded, as they would be were this industry not oligopolistic and non-transparent. After all it is the customers taking the risk, not the investment bankers. But they are not equally rewarded. Far from it.
    3. Would Barclays Capital have made large sums of money from a re-bounding investment climate unless the tax payer - oh yes the customers again - had not forked out trillions of Euro's/Dollars around the US and Europe in order to provider the liquidity for the market - of course not!

    So these directors, working essentially for "Customer's Capital" in a market of customer's liquidity, are being paid millions without any proof of their relative performance. The rest of us get .5%. Fair? Only if you are bank director.

  • Comment number 42.

    Presumably, Mr Peston, while he got a hugh percentage this year it will drop to 0.1% after 12 months - just like their ISAs?

  • Comment number 43.

    £100 invested in Barclays two years ago would be worth £503 today.

  • Comment number 44.

    There are people I come across on a daily basis that are enthralled by bankers.

    Sad.

    But we also have folk who look up to royals.

    Words fail me.
    Not my fault. But the words.

  • Comment number 45.

    Perhaps the law should be changed so that remuneration packages should be formally voted on by shareholders. To make sure that the idle pension funds (who are probably in on the gravy train themselves) do their job, we also need a change in the law to get a third of the boards of pension funds filled by the people whose funds they are supposed to be managing. And getting the banks to depart the UK might be the best thing we could do to make us "re-balance" the UK economy. Otherwise it won't change while the Government continue to be the bankers' patsies.

  • Comment number 46.

    I'm not close to how banks work, but it does look like Mr Diamond has been rewarded for underachievement, so maybe RP needs to be more specific about how this gentleman's performance is measured.

    I totally understand paying a bonus to a top saleman for example, where the incentive to outperform is understood at the outset. In fact good on anyone that meets and exceeds their targets. But I cant see exactly what the bonus is being paid for here. I know sometimes CEOs get targeted on the share price of the company, but even that wouldnt be cause for a massive bonus in this case.

    It's not about envy as yes, I'd pay him a fair old whack to run what is a massive (and I guess massivley complex) company, but the bonus payment is lets say............questionable.

    I do remember a "fly on the wall" documentary a couple of years ago where a reporter got a job at Barclays - in Guildford I think. Didnt make for comfortable watching as the staff seemed bullied and under pressure to sell products. Does this still go on?

  • Comment number 47.

    The banks continue down a road that almost certainly, sooner or later, must lead to their own demise.

    I also heard a senior politician yesterday in a speech throwing his weight behind the “risk takers” (amongst others)…. I suspect that the measure of a successful bank operation is still based on how much risk you take knowing that when it goes skyward (in a flash) you can just walk away – the mindset is still there.

    To me then, it’s only a matter of time before then next crisis rocks the banking sector unless of course some sort of diversionary tactics come into play – a small war should do it - preferably with an oil rich country with a small standing army… now let me see…….

  • Comment number 48.

    Rather than lok at individuals, may be it would be better to compare what was the total remuneration paid including bonues and compare this to the total dividend paid to shareholders. My guess is that this will be much less favourable to shareholders than in other sectors.

  • Comment number 49.

    """Andy wrote:
    @openside50: And exactly how much tax do the banks actually contribute? How does passing money around, and concentrating it in the hands of the few, generate wealth? How exactly do they help the country? At the moment I can only see a deficit they generated which we will be paying for for many years, whilst the bankers in question swan around with multi-million pound bonuses."""

    How much?........a lot more than you seem to be aware of

    For starters of the £9m in pay and renumeration received by said Mr Diamond that seems to have upset Mr Peston so much, at least half will go to the exchequer

    The bank bashing that seems to be the sum total of this blog these days is bad enough but can be written off as the musings of a left of center writer on a left of centre media outlet, but the tone now being set by the governor of the BOE however - which will be seen at official policy - in his latest speech may be the last straw as far as some of the banks are concerned

    HSBC chose to come here they can just as easily leave

  • Comment number 50.

    Little use complaining. People like Bob Diamond (and there are plenty of top corporate executives in his bracket) live in an entirely different world from those who provide their wealth. They are the uber-rich. They're the people who run the world. The banks alone have been ordered to reveal salaries and bonuses but you need hardly look further than the obscene profits of Microsoft, Apple and some of the oil magnates to realise many more are at it.

    They no longer have to worry about taking care of those who provide their wealth - that's us. They pour lies and propaganda onto us, largely to make us believe our lot is our fault.

    At least these disclosures show there is plenty of money in the economy - masses of it - just that it isn't in OUR hands. They insist we should spend what little we have left... to fill their coffers... in the interest of economic recovery.

    In a very similar vein is Michael Moore's new documentary "America is NOT broke" in which he reveals that 400 Americans own more than half the wealth in their economy: that's the wealth of 155,000,000 folks on the non-uber-rich level!

  • Comment number 51.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 52.

    This "report" illistrates exactly why so many of us feel thet the BBC is biased and is now incapable of fair and balanced reporting.

    I look forward to Mr Peston rants on paying footballers £8 million a year at a time when most clubs are struggling finacially.

    Or Mr Pestons rants on the BBC paying its "talent" £6 million pa - particularly as the BBC is wholly reliant upon tax payer handouts. One rule for bankers another for BBC staff!!!!!

  • Comment number 53.

    40. At 17:15pm on 7th Mar 2011, mr ff wrote:
    #26

    There is no guarantee that we will lose only a small amount through them moving overseas, its likely we would lose the very significant amount of income tax that Barclays employees are paid, not to mention the skills they have
    ==============================================

    Ah yes, so Barclays are going to move 2000 branches and 80,000 employees to Abu Dhabi, are they?

  • Comment number 54.

    who in their wildest dreams ever imagined that a tory government would do anything other than allow the very people that necessitated "The Huge Deficit we Inherited" to line their pockets with yet more taxpayers money.
    the tories have made a complete mess of everything they have iniated since coming in to office from playing the hokey cokey with schools
    "You get your school fixed up, your school pulled down, up down up down shake it all about Gove does the hokey cokey and your on the list, hey thats what its all about"
    to managing to make the best special forces in the world look utterly stupid in Libya.

    funny thing is the banks will move on anyway, they dont pay that much tax and China wont be too hard on them>

  • Comment number 55.

    33. At 17:07pm on 7th Mar 2011, mr ff wrote:
    ================================================

    "I dont understand how what Barclays pays concerns you Robert, its a matter for Barclays shareholders, and not you a casual observer."

    You don't understand much then do you? Public Interest? So when the bankers at BarCap, a.k.a Lehman Bros undead, manage to mess up again at the casino in pursuit of bonuses, then there will be no equity left in Barclays PLC to absorb the losses due to, yes you guessed it, payment of bonuses. And being 2B2F will be bailed out again by HMG.

    "The reason for the Barclays fall in share price was its shares were significantly over valued by the market in the past, in fact they are now undervalued, but this is because banks are busy increasing their capital to cope with the new rules enforced by the government."

    I trade Barclays shares every day mate. Never heard such rubbish.

    "In all honesty Mr Diamond has done a pretty good job, and thus deserves what was set down for him in his contract."

    A good job in what regards? shareholder performance? He's done a good job for the other bankers, that's for sure.

    "Maybe the next article we have can be about something a bit more relevant to the public?, not this pointless 'banker bashing', its tedious, especially because much of it seems to be bred by jealousy."

    No, people are sick of propping up bankers bonuses, shareholder dividends, private pensions, BTL portfolios through the inflation, rising inequality, unemployment, cuts enforced upon them.

    "It seems that almost all of these blogs focus on the financial sector, which means frankly they aren't educating us to other parts of the economy that matter more."

    A pathetic attempt at trying to change the subject? What part of the economy matters more? Finance and debt IS the economy.

  • Comment number 56.

    As anyone familiar with banking will know the concept that banks make huge profits due to the efforts of "highly talented" employees is delusional panglossian rhetoric , rather the ruthless amoral exploitation of an inadequately regulated oligopoly.Absent a competitive market and proper regulation this obsenity of unjust enrichment , be it of employees or shareholders, will continue to blight our economy.

  • Comment number 57.

    43. At 17:25pm on 7th Mar 2011, chja wrote:
    £100 invested in Barclays two years ago would be worth £503 today.
    ===========================================

    Which is why the government should have nationalised them because it was taxpayers who underwrote that £100. Another case of privatising the profits and socialising the losses.

  • Comment number 58.

    #53

    Did you really think I meant that?, obviously I wasn't talking about ordinary retail branches.

    I were talking about investment bankers, and yes they do seem to move around quite easily.

  • Comment number 59.

    44. At 17:26pm on 7th Mar 2011, prudeboy wrote:
    There are people I come across on a daily basis that are enthralled by bankers.

    Sad.

    But we also have folk who look up to royals.

    Words fail me.
    Not my fault. But the words.
    ======================================

    It never ceases to amaze me that those who most support a system that is supposedly based on competition and survival of the fittest tend to be the most deferential and servile to their "betters".

  • Comment number 60.



    These people are so great at their jobs that they made huge losses for not only their companies but also brought the country to it's knees. Where has common sense gone ? If you performed like this in any other job you would be fired, in banking you get a bonus...

    Plenty of people to replace them, and if they want to leave the country and work abroad because they don't get the renumeration here, then let them go.

    They are not geniuses nor irreplaceable.

  • Comment number 61.

    @22....Dear United Dreamer

    I suggest you visit the following link and listen....

    Unbelievable, I know.....

    http://www.youtube.com/watch?v=Tkstrexj3ds

  • Comment number 62.

    58.

    Let them go. They're not worth the cost.

  • Comment number 63.

    The heading says "bankers earn millions while shareholders lose out".

    This is incorrect.

    It should say "bankers are paid millions..." unless there is evidence of a different position.

  • Comment number 64.

    Can no one understand the ground swell of reaction from ORDINARY people. Forget the fact (or fiction) that banking pays 20% of UK tax revenues. This is not a figure that can be related to by people who pay a greater percentage of their income in tax than your obviously, indispensable bankers. Have we bred a generation of Gekko clones.

    I have no political views on this but my point of view is solely humanitarian.

  • Comment number 65.

    "54. At 17:49pm on 7th Mar 2011, el diablo wrote:
    who in their wildest dreams ever imagined that a tory government would do anything other than allow the very people that necessitated "The Huge Deficit we Inherited" to line their pockets with yet more taxpayers money.
    the tories have made a complete mess of everything they have iniated since coming in..."
    = = = = = = = = = = = = = = = =

    You can't blame the Tories. No national government can control the operations of these multinationals, nor their transfer pricing antics and other stuff. This is the free market and whether you like it or not, these corporations can and will move headquarters and operations to locations that favour them. If you were running a successful mutlinational biz, so would you.

    If people want to vent anger on the banks, simply stop using them. Very few of us actually need a bank. Every time you use debit card (let alone a credit card) you are helping the banks fill their coffers as they charge merchants (IIRC under general charges - it used to be a fixed charge per transaction plus a % of the transaction. Correct me if wrong). Every time you authorize a direct debit the banks share a tiny cut with the Direct Debit organisation.

    But don't just blame the banks. Look at the profits of the energy companies, the oil companies, raking it in while the impoverished are trying to balance warming their homes and food. We never hear about bonuses and salaries in these other outfits. We have no idea how much of their profit Bill Gates or Steve Jobs take home; or how many Rolls Royces and private jets have been gold-plated by kings and sultans, while we worry about whether we can afford the fuel to get to work.

  • Comment number 66.

    5. At 16:03pm on 7th Mar 2011, hughesz wrote:
    "...Shareholders could make changes to executive pay if they wanted to , they are just to lazy to take action . Pension funds are the worse, ultra lazy . Get a SIPP and vote with your feet...."
    ++++++++++++++++++++++++++++++++++
    Very much so but you often can't do that if you have an AVC scheme tied to a complany pension. The fund managers know that they have "got your money".



  • Comment number 67.

    Robert,
    Banking - Professional Services the Macro
    Surely the 2 key related points which I have yet to hear clearly articulated are:
    - Re Banking Profits...huge and enviable compared to many sectors...where does the profit come from? Companies and individuals (largely the former) surely if 50% of this was left in the Companies or with indivicuals these billions would do more for the Global Economy ?
    - Related to above..over the last 40 years or so we have increasingly 'over' valued professional services (including Investment Banking) we are now at the tipping point where Investment Bankers/Lawyers/accountants must realise that they do not bring great added value nor are their standard fees value for what they do...again, half left in the businesses or with individuals would leverage greater value for economies at large..
    PS I have bought and sold a no' of businesses and have been increasingly astonished at the transaction costs...capital which would have been better left in the businesses.

  • Comment number 68.

    >"So now that shareholders know that the top five below board level earn £14.3m, £14m, £9m, £6.5m and £5.2m - or £49m in total - will they think that's miles too much, just about right or too little?"



    At least the relevant ‘vested interests’ are identified here. - The shareholders!

    The question is, why does Peston feel it necessary to speak up for them?

    I would suggest that he is not really interested in the shareholders. This story is important because the banks (regardless of who was bailed out and who wasn’t) are public enemy No.1 and stories about bonuses make good copy.

    The question is; when the likes of HSBC and Barclays have been driven out of the UK through ‘political’ taxes and the underlying hostile atmosphere, and the UK has lost its only reaming comparative advantage (and a lot of tax revenue), will the lefties feel better?

  • Comment number 69.

    The profits from Barclays capital in the last financial year (which is what the bonus is based on) increased from £2,464m to £4,780m. A 94% increase. So his bonus is 0.28% of the increase he has presumably helped provide for the business. Is that an unfair proportion?

  • Comment number 70.

    There is theory - that reward matches effort/success - and there is practice; namely, get what you can while you can and scarper before anybody notices the well has been bled dry. Captialism, as practised by the banks is, to paraphrase Mervyn King, predicated on the notion - "never give a sucker an even break".

    So why is anybody surprised that there is no tangible connection - nor has there been in living memory - between boardroom remuneration and business achievement for our largest companies? The whole network of incestuous remuneration committees ensures that "if you scratch my back, I'll scratch yours". Couple this with the large institutional investors who seem completely unaacountable to anyone, and yet wield (theoretically) enormous power as shareholders and we have the outcomes that have become all too familiar to us - we, the little people (whose money that are playing with) disenfranchised and out of pocket.

    To quote Samuel Johnson “And then, Sir, there is this consideration, that if the abuse be enormous, nature will rise up, and claiming her original rights, overturn a corrupt political system.”

    Fat Chance!

  • Comment number 71.

    Why would Barclays, a great old brand name, want to be associated with the word "GREED"?
    Why would HSBC, LLOYDS, RBS or any of these "charities" want to be associated with that word?
    We all know that "Wall St" and "greed" are associated.
    "Greed" is ruining the west, via the banks.
    Successful traders who earn an average of 250k.....fair enough.
    But the boardrooms are involved in wholesale greed.
    The City of London, once associated with "expertise" and "efficiency", is now a by-word for "failure" and "greed".
    Greed, greed, greed....welcome to the world of "big finance".
    A "country estate" a year? When, in history, has that ever been a decent salary?
    It's obscene. Utterly obscene.
    80 year-old pensioners, paying tax, are propping up these characters.
    Children, suffering because the NHS is short of equipment, are propping up these characters.
    Ordinary working folk are propping up these characters.
    Perhaps the signs over all these banks branches should be replaced with "Greed machine- Enter at your own risk".
    For Gods sake, you banks, what are you doing to your image?
    "Oh but we must pay the right rate to attract the best"......a typical government rant....and complete garbage.
    If you want to rip-off the Chinese population, the American population or the European population....that is their problem.....but we in Britain know when we are being had.
    People all over the world are "rolling over" and letting these banks walk all over them, and their governments.
    Obama, Cameron, Merkel, Sarkozy.....where are your b...s? The sad fact is that the fools in Western governments are frightened of the banks, despite the fact that we are their best customers.
    Fools, impotent fools.

  • Comment number 72.

    terrypaineismyhero, whilst I accept that all banks benefit from the financial compensation scheme this is a practice in place throughout all of Europe and is the price for doing this type of business. It is a contingent liability of the Government which I cannot remember ever having been called upon.

    I note, with a wry grin, the howls of protest regarding the amount of direct taxes paid but, at the moment businesses are only taxed in the UK for profits made in this country.

    Clearly dividends have been low as banks need to shore up their capital base given the potential Core Capital Requirements and I am at a loss to understand how they can be expected to significantly increase lending under these circumstances.

    Lest we forget it was HBoS, Northern Rock and RBS who were in greatest danger of collapsing, the other banks being caught up in the panic.

    On a different tack, I've often wondered if it would have been cheaper for HMG to bail out HBoS direct rather than encourage Lloyds to take them over and then end up having to bail out Lloyds, I guess we'll never know!

  • Comment number 73.

    It's just the same inflated market type as football players; if there are fools out there willing to invest and pour in money to support inflated wage packets then that is up to them. So shareholders you need to decide and vote on what you think is right and if you don't like it sell your shares.

  • Comment number 74.

    "61. At 18:15pm on 7th Mar 2011, coplani wrote:
    @22....Dear United Dreamer

    I suggest you visit the following link and listen....

    Unbelievable, I know.....

    http://www.youtube.com/watch?v=Tkstrexj3ds"

    Thanks for the link - I will check it later.

  • Comment number 75.

    The banks are all the same. Like all Financial institutions they are run soley for the benefit of the directors and employees. Neither shareholders or ustomers are on their radear unless of course the banks can see a way of generating more income from them.

    Both goverments have demonstrated naivety in the extreme by assuming they can modify the culture.

    Let a bank go to the wall, tax them to the hilt (both the corporation and the employees), let a few go abroad. And before you accuse me of being another "lefty" I am a staunch Tory who worked in the City for over 30 years and openly admit I made a good living. Nothing comparable to these boys though. I was judged on earnings per share growth. Several years I received zero bonus. Fair enough.

    By the way if anyone truly beleives these people ar superstars my experience of the City was that you wouldn't let most of them take your dog for a wlk on a wet night - but they are well connected!!

  • Comment number 76.

    The government don't own shares in Barclays. I don't own shares in Barclays.

    Lets remove the implicit support of the tax payer (or tax to claw it back) and leave them to get on with it. If the shareholders want to pay them a fortune to flush money down the loo I simply don't care - that's their business not mine.

  • Comment number 77.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 78.

    So if such banks not properly paying shareholders, not lending money to business, not giving a return to savers, not providing customer satisfaction, not paying corporation tax, and not repaying the poisonous mountains of debt needed to underpin them, even to the unborn... Then what good are these banks? I'd be surprised if any other country wanted them. Go, go now, and I'll set up a bank that will be a lot more useful. I'll probably call it Nick's Bank.

  • Comment number 79.

    I find Peter Bench's justification of Banker's bonus's being aligned with Premier League pay misguided.

    Are not 50% of these clubs, despite the funding of ego maniacs with more money than sense, bankrupt.

    Sooner or later these clubs are going to go under and no doubt the small businesses who have supplied them with services will be dragged down with them.

    However the footballer's will have their over hyped salaries stashed away in some tax shelter.

    Sorry but bankers and footballers are NOT worth their remuneration and the sooner we face up to them the better.

  • Comment number 80.

    Can Bob Diamond be worth the £9m he received in pay and bonuses and the £15.2m in shares he also received from earlier incentive schemes that have just matured (or vested, to use the jargon)?

    Barclays would say Mr Diamond is simply being paid what's required to retain the services of an acknowledged star of his industry...

    Only a measly £9m received in pay and bonuses and £15.2m in shares for this wonderful bright star... Shining like a Diamond in the sky!

    No self respecting corporate sociopath... I mean upstanding pillar of the community should have to scrape by on such an awful pittance... How ever will he be able to maintain all his 'global assets' with that excuse for an income? It's all those envious proles sucking relentlessly upon his hard earned dues through theft by taxation! They're the real problem! They are the enemies of enterprise...

    Announcing - today - The Bob Diamond 'Fairer Deal for Bob' Collection Fund.
    Our resident Superman is really struggling through these hard times and all his pals down at the gentlemen's club are laughing at him with his post crisis diminished 'earnings'!
    So come on lets all show Bob we want to give him so much more... Shareholders, Management, Employees, Cleaners, Members of the Public, Unemployed, Senior Citizens - Donate a few bob for Bob!

    This message is endorsed by: -
    The Adam Smith Institute
    The Milton Friedman Appreciation Society
    The Ayn Rand Institute
    Alan Greenspan
    George W Bush
    American Enterprise Institute
    Conservative Central Office
    Margaret Thatcher
    Ronald Reagan
    Grover Norquist
    Tony Blair
    The Republican Party
    The Democratic Party
    The Heritage Foundation
    Project for a New American Century
    Barclays Public Relations Dept
    The British Bankers Association
    and the Judean People's Front!
    *The above individuals have all agreed to donate £20k to boost Bob! How much will you give to boost our brilliant Bob?! (£20k is a reasonable amount - especially as it's tax deductible...)

  • Comment number 81.

    I wonder what my employers would have said if I lost them 50% of every order I managed for them? I hope they would have said never mind we know you are trying your best and here's a big bonus, don't think so. For all of the hypocrisy being spouted about having to pay top dollar for the best, seems like top dollar has been paid for not even second best. I know it is the tendency of management to "push down the detail" whilst "pulling up the credit" but these people must have pretty good PR machines to get away with what they have done.

  • Comment number 82.

    A banker, a Daily Mail reader and a benefit claimant are sitting at a
    table sharing 12 biscuits. The banker takes 11 and says to the Daily
    Mail reader, 'Watch out for the benefit claimant he wants your biscuit'

  • Comment number 83.

    Without the input of those high earners Barclays profits would have been much reduced or maybe a loss. Shareholders should support market level remuneration to those who have done well. Otherwise they'd have been off, and the share price would be much lower. As ever, those who continually lose money get the push.

    Anyway, the majority of banking problems over the last few years have been caused by imprudent lending. Nothing to do with the profitable trading activities of a bank like Barclays, which is the area in which most of the well-paid work.

  • Comment number 84.

    All good knock-about stuff, but there's another way of looking at this which is being ignored.

    Diamond's base salary is £250,000 in cash. That's not much more than the 20 times national minimum wage that some on this blog call for. The rest of his compensation is tied up in shares which if WOTW and others are right are all completely worthless. For this he has a job description which requires him to run one of the largest financial services organisations in the world with the capacity (if badly run) to bring down governments and countries. So that's more power than it should have I know, but that's the current reality. He has committed to double Barclays' profits by 2013.

    And just for the fun of it he works hours that mean he doesn't see much of his family, gets called in front of government select committees, has his performance and pay monitored in huge detail by Robert and others and finds that he and his family lose their right to a private life.

    Now call me mercenary but £250,000 a year and some shares wouldn't be enough to get me to take on the job and I suspect a job advert would attract many applicants. So it begs the question of what is a fair compensation package to pay to get a chief exec of a global bank who you believe can double profits in two years?

    My view is that it doesn't matter - but I would place a limit of £1m on the level of total compensation (including pension contributions, bonus and all) that companies can claim as an expense against profit. So if they want to pay more they can but it gets taxed twice - once as corporation tax and then again as 50% income tax. But after that leave it to the shareholders and board to decide who they want to appoint and how much to pay them. And then regulate them sensibly so that growth is long-term and sustainable.

  • Comment number 85.

    Disgusting and Revolting?

    Does anyone else see parallels with the down trodden in the Middle East?

  • Comment number 86.

    The only current 'protectionism' in British business is of the 'over-privileged'.

    Top of the list is as being 'over-privileged' is Diamond ... in real a 'big society' ... the UK's business and banking and constitutional structure would prevent this kind of executive banking sleaze.

    The other nauseating issue with this is that Diamond does not appear to think that he has received a 'windfall' ... he actually believes himself that he is worth it.

    While this continues ... the notion of 'fairness' and a 'big society' is an absolute non-starter.

  • Comment number 87.

    I like Stephen Williams idea of giving every UK citizen £1000 worth of bank shares.

    It means that we all become shareholders and should be able to vote on the salaries and bonuses of bank bosses. It also spreads the sale of these shares over many years so that we can maximise the share price rather than dump them all on the market in one go, thereby reducing the price.

    A worthy idea Mr Williams. One certainly worth considering.

  • Comment number 88.

    If this is what is required to keep top talent within an industry, then surely this says something about the character of people in said industry.

    They are just in it for the money. I am an engineer in a global company. I get paid enough to enjoy life and get an enourmous sense of job satisfaction through helping the development of the world for the better.

    The people in engineering are some of the brightest minds in the world, yet do not require carrots of the order of £millions to do their job to the the best of their ability. Bankers are only in it for the money - so what do you expect?

    If the bonuses were drastically cut, let the gold diggers walk and let the ones who are there for the right reasons do the job! They will most likely do the best job of it too - but in the long term!

  • Comment number 89.

    Without reading all the comments, we need the best and have to pay them huge sums to keep them. This ensures our economy is then stable and carefully managed by experts as it was before the financial crisis hit us. Not even the 'experts' saw that coming, because their heads were in the clouds. It is the experts that tell us we need them. Shareholders should question and not idly approve the directors remuneration packages. I'm marching with my feet. I have been with Barclays since 1971, 40 years. If the experts on huge sums don't like reductions in bonus, then my advice would be for them to march with their feet. Somewhere else would be nice!

  • Comment number 90.

    "82. At 19:23pm on 7th Mar 2011, Payguy wrote:
    A banker, a Daily Mail reader and a benefit claimant are sitting at a
    table sharing 12 biscuits. The banker takes 11 and says to the Daily
    Mail reader, 'Watch out for the benefit claimant he wants your biscuit"

    Haha very good Payguy!

    And then the banker says he could have taken the other biscuit if he wanted to, but won't this year - because he wants to show some restraint!

  • Comment number 91.

    #80.

    Will I'm with the Peoples Front of Judea! To get into the PFJ you really have to hate bankers...

    So, how much do you hate bankers?

  • Comment number 92.

    Re The banker versus the footballer bonus row....

    Footballers can earn as much as they can get...Fair enough...if the club goes bust so what...who cares...It's not going to affect me nor my family or friends except the poor supporter who has forked out for his entertainment.
    i.e. Entertainment doesn't cost or affect us dearly.

    Banker's and bonuses on the other hand seem to have just about wrecked our economy through greed and they are costing us dear.
    Also their antics have been allowed to continue, so the threat to the economy is still apparent....i.e. They are a cause for concern for the whole population.

    But although it is of great concern in the UK, we only have to look to the States to see the problem magnified 100 times....see/ listen to this link.....

    http://www.youtube.com/watch?v=Tkstrexj3ds



  • Comment number 93.

    What I fail to grasp is how exactly all these so called wizards are the " best in their field" and have to be paid the alleged going rate othewise they will lose them. They are first class failures, nothing more or less. Why don't they just let them go and ruin someone elses's bank ???

  • Comment number 94.

    @82 - Brilliant! :-D

    Nothing will change without an end to impunity for corporate incompetents.

    Having cost shareholders billions, Daniels and Blank walked away from Lloyds with huge rewards too. Does anyone seriously believe that the shotgun HBOS takeover was carried out "with due diligence". Limited liability needs to be removed from company directors. As compensation they can be guaranteed high placing on a council house list.

    Institutional investors too should be properly accountable to their beneficiaries.

  • Comment number 95.

    Robert you need some more balance in this piece. Focusing exclusively on shareholder return as the basis for rewarding top management raher than broader measures - profit, return on equity etc - is clearly flawed.

    Now when Barclays announced it's results in Feb Diamond announced current levels of return on capital in some of the portfolio was not acceptable. Increased regulatory capital impacts here as well as increased impairment in the downturn. So clearly some businesses will be in for a shake up.

    However, if you dig into the numbers you are likely to find many of these low return businesses sitting outside the investment banking arena. So the levels of pay you are highlighting here are likely to be justifiable to shareholders on a go forward view of the current / likely performance of the specific business lines these people manage.

    Without looking at the problem at this level of detail I don't believe your argument stacks up. You risk simply peddling a populist perspective rather than seeking to inform which must be the imperative of BBC journalism.

  • Comment number 96.

    @ 76. At 18:57pm on 7th Mar 2011, Fred wrote:

    > Lets remove the implicit support of the tax payer (or tax to claw it back)

    There is no way to remove the support of the tax payer, except by waiting for Barclays to fail then letting it happen. The only way to reimburse the taxpayer is to tax the bank down to size.

    I just can't understand the delay - this is a democracy, and the public have made their choice. Who is dragging their feet?

  • Comment number 97.

    #6 At 16:07pm on 7th Mar 2011, Curt Carpenter wrote:
    It's quite simple really: bankers have made it to the other side of Mr. Carroll's looking glass!

    "... how can executives be worth quite so much when the owners of the business, the shareholders, have lost so much money?"

    "Why, because it could have been so much WORSE of course!
    Do have another cake dear. More tea?"

    =========

    Hahaha - very funny!!!

  • Comment number 98.

    82. Brilliant. I'm gonna use that one!

  • Comment number 99.

    84. At 19:26pm on 7th Mar 2011, Slessac wrote:
    My view is that it doesn't matter - but I would place a limit of £1m on the level of total compensation (including pension contributions, bonus and all) that companies can claim as an expense against profit. So if they want to pay more they can but it gets taxed twice - once as corporation tax and then again as 50% income tax
    ==================================================

    You need to go back to tax accounting 101. All "compensation" gains relief from corporation tax. No limit.

  • Comment number 100.

    Great, I hope most Banks will leave the UK than we can work on the structural problem of the UK. Too many accountants and no people who make products.

    Best pay - best people ? LOL

 

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