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Barclays head not suffering enough?

Scott Jagow Mar 27, 2008

TEXT OF INTERVIEW

Scott Jagow: The British bank, Barclays, has written down more than $3 billion in subprime investments. Its stock has plummeted 30 percent. And yet, the bank’s president, Bob Diamond, will take home $42 million in pay for last year.

We’re joined by correspondent Christine Seib from the Times of London. Christine, what gives here?

Christine Seib: OK, well we have to remember a couple of things. He is taking over a huge pay packet that is actually smaller than last year’s. The other thing that he’s being affected by is he has a huge stake in the bank himself, in Barclays, and he’s seen that cut. But as you can imagine, there’s a lot of anger from unions here who say that Mr. Diamond’s multimillion-pound payday dwarf the 17,000 pounds a year that is paid to the average bank employee at Barclays.

Jagow: Well, that’s a pretty good argument. What do his supporters say?

Seib: They argue that you can’t judge Mr. Diamond just on the past year. Yes, last year may have been a bit tough, but they still made a record profit. And over the past three years, he has beaten every target set for him.

Jagow: There’s been some talk here in the States about perhaps doing something about compensation, in terms of regulating compensation. Anything like that in Britain?

Seib: I think an issue that has been raised is that should banks be paying out multibillion-pound dividends to their investors at the same time as demanding that our central bank give them cut-price liquidity? Shouldn’t the banks be taking a little more pain?

Jagow: Well, shouldn’t the bank’s CEO be taking a little more pain, too?

Seib: Well, they’ve taken a little pain. They haven’t received their full bonuses. But I guess, yes, you definitely could argue that no one is feeling too sorry for them.

Jagow: All right, Christine Seib from the Times of London. Thank you.

Seib: Thank you very much.

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