LONDON, Jan 11, 2011 – Bob Diamond, the new chief executive of British bank Barclays, acknowledged on Tuesday the need for a "safer and sounder" bonus system amid increasing public anger over excessive pay for bankers.
Addressing a cross-party panel of lawmakers, Diamond however insisted that it was important to reward staff in addition to their annual salaries.
Diamond, an American, added he had yet to make a decision on whether to waive his bonus for a third year running.
"The system needs to be safer and sounder in terms of how compensation works but it\’s in the interests of everyone in the country that we shift growth to the private sector," Diamond told the Treasury Select Committee.
"I don\’t agree that I can isolate bonuses and assume that would have no consequences on the rest of the business."
Diamond is reportedly set to be offered a bonus of about eight million pounds (9.6 million euros, 12.5 million dollars).
"I\’ve not been awarded a bonus yet. I\’ll make that decision with my family, as I did last year," he said on Tuesday.
Diamond is infamous in Britain for pocketing huge bonuses as head of Barclays\’ highly successful investment banking arm.
He became Barclays\’ chief executive on January 1, replacing Briton John Varley who had been at the helm for six years.
Banks in Britain are facing increased pressure to award smaller bonuses this year as the Conservative-Liberal coalition government demands restraint and the opposition calls for the pay-outs to be more heavily taxed.
Prime Minister David Cameron has warned that he wants to see a smaller bonus pool than last year, while his deputy, Liberal Democrat leader Nick Clegg, has said that sky-high pay-outs seemed to come "from a parallel universe."
Their comments followed weekend reports that Stephen Hester, the chief executive of bailed-out Royal Bank of Scotland (RBS), would be paid 6.8 million pounds in bonuses and salary this year.
RBS is 80-percent owned by the British taxpayer after a massive government bailout which followed the bank being ravaged by the credit crunch and the takeover of Dutch giant ABN Amro at the top of the market in 2007.