Bob Diamond to be new Barclays chief
- 7 September 2010
- From the section Business
One of the world's highest paid bankers, Bob Diamond, is to become chief executive of Barclays.
The American, who has made about £100m as head of the bank's investment arm Barclays Capital, will replace the current chief executive John Varley next year.
Mr Varley was credited with steering Barclays through the financial crisis.
Meanwhile, HSBC chairman Stephen Green is also moving on to become a government trade minister.
Mr Green will take up the position of minister for trade and industry from January, ending his 28-year career at HSBC, having spent three years as chief executive and four years as chairman.
The move was in response to a request from the prime minister, HSBC said.
BBC business editor Robert Peston said Mr Green's appointment by the coalition government "will doubtless be heralded as a coup by the prime minister" even though the record of business people in government has been "patchy".
Meanwhile Bob Diamond's appointment as Barclays' new boss will reinforce a view that Barclays sees its future as a global investment bank, he said.
Marcus Agius, Barclays chairman, called Mr Diamond "superbly qualified", with "a proven track record as a business leader".
"I am honoured by the board's confidence in me and greatly motivated by the challenge of leading Barclays during the critical period ahead," Mr Diamond said.
"As a leading global universal bank, Barclays has the right model, the right strategy and above all the right people to deliver for all our stakeholders."
His promotion means that Mr Diamond can expect to earn up to £11.5m a year - although some of this will come as part of long-term incentives and will not be paid immediately.
His base salary will be £1.35m, Barclays said, with the rest awarded in bonuses.
"The compensation arrangements have been benchmarked against a peer group of global universal banks, industrial companies and financial services institutions," the bank said.
But Robert Peston warned that the rewards may be controversial.
"At a time when the economy remains weak, this package is likely to spark widespread criticism," he said, though he added that the choice of Mr Diamond was no surprise.
"Even Mr Diamond's most jealous rivals would concede that he has done an impressive job in building up Barclays Capital; and that it's the growth at Barcap which has turned Barclays into a leading global financial institution."
Investors appeared unimpressed by the news, however, with Barclays shares falling more than 3% in morning trading on Tuesday.
Barclays reported profits of £3.95bn for the first half of 2010, with the vast majority coming from Barclays Capital.
BarCap will now be run by Barclays executives Jerry del Missier and Rich Ricci, who will become its co-chief executives.
While formally announcing Stephen Green's departure, HSBC did not name his replacement as chairman.
Mr Green follows two other former business leaders, Mervyn Davies and Sir Digby Jones, into the business department.
The relationship between Mr Green and Business Secretary Vince Cable will be closely watched, however, as they appear to disagree on proposals to break up big banks.
Mr Cable chairs the banking commission currently looking at how to divide banks into their retail and investment banking operations.
Mr Green, as head of one of the world's biggest banks, has expressed concern over such moves.