Diamond to be new Barclays chief

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.

Pay rise

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.

HSBC shake-up

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.

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